Year 10 Inflation

Inflation can be defined as (pick the best answer)

• persistent and appreciable rise in the general level of prices over time

• increase in prices

• persistent and depreciating decline in the general level of prices over time

• persistent and appreciable rise in the some prices over time

The target rate for Inflation in Australia is:

How have you enjoyed Week 2 of Economics?

• Very very much

• Very much

• Somewhat

• Not much at all

Real prices are adjusted for_____________. Nominal prices are not.

• economic growth

• inflation

• externalities

• changing prices

What can cause inflation? (choose the best answer)

• Prices just rise over time

• Demand inflation - People's demand increasing

• People demanding more, costs of production rising and governments printing money.

• People demanding less, costs of production rising and governments not printing money.

What statement fits the cause of demand inflation:

• Too much money chasing too few goods

• Too little money chasing too few goods

• Some money chasing some goods

• Too much money chasing too many goods

Who are inflation winners?

• High income earners, borrowers and importers

• High income earners, bank savers and importers

• High income earners, borrowers and exporters

• Low income earners, borrowers and importers

Who are the inflation losers?

• Low income earners, Bank savers and exporters

• High income earners, Bank savers and exporters

• Low income earners, borrowers and exporters

• Low income earners, Bank savers and importers

An index number is a figure representing price or quantity based on a ________ value.

If the CPI in 2019 was 108.5 and in 2018 it was 105.9, what was the inflation rate for 2019? Round to 2 decimal places.

• 2.46

• 2.45

• 2.39

• 2.43