IB Economics - Inflation

When inflation is high the _______________of the dollar decreases

• cost value
• purchasing power
• importance
• validity

If CPI goes from 100 to 300 and your salary goes from $100,000 to $200,000, what happened to your purchasing power?

• Increase
• Decrease
• No change

What is inflation?

• rise in all prices
• rise in most prices
• rise in some prices
• rise in general prices

Demand-Pull inflation can be describes as too many _________ chasing too few __________

• jobs, workers
• consumers, producers
• dollars, goods

What 2 types of inflation are there?

• demand pull and cost push
• demand pull and supply glut
• supply glut and demand side
• supply inflation and demand inflation

What the definition of deflation? 

• decrease in the average price of goods and services
• occurs when the price of goods and services rise
• increase in prices
• I don't know

What causes demand pull inflation?

• rise in price due to a decrease in supply
• a rise in price level due to an increase in consumption
• a rise in price due to an increase in the cost of production
• a decrease in price due to a decrease in supply

Which of the following groups suffer from high inflation

• Borrowers
• Lenders
• Taxpayers
• Property Investors

GDP that is adjusted for inflation

• real GDP
• nominal GDP
• price level
• net national product

If aggregate demand rises faster than producers can supply goods services

• demand-pull inflation
• cost-push inflation
• inflation