Inflation and Bubbles and Tulips: Crash Course Economics #7

Inflation is an ________ in a currency supply relative to the number of people using it, resulting in rising prices of goods and services over time.

• increase

• decrease

• stagnation

• overestimation

What is a bubble?

• A collection of soap molecules

• The price of just one good soars as a result of collective delusions and irrational exuberance.

• A fun way to pass an afternoon.

• Molecular cohesion among water molecules facilitated by the bonding of polar molecules in the soap.

A ______________ basket is a list of goods that represents what an average consumer buys in a year.

What is the most commonly used measure of inflation?

• inflation rate

• currency index

• IBM

• CPI

Real means that a price from the past ______ been adjusted for inflation.

Nominal means that a price from the past _________ been adjusted for inflation.

Being rich is about ....

• how much money you have.

• how much purchasing power you have.

• how many bank accounts you have that contain over $100, 000 (FDIC insured).

• your relative position with respect to eh CPI.

Demand _________ __________ is too much money chasing too few goods.

Inflation is the result of having ...

• more goods and services than money.

• too many goods and services with respect to the CPI.

• more money than goods and services.

• incompetent economic advisors.

What makes an economic bubble burst?

• The market runs out of buyers

• The market runs out of sellers

• Supply and demand finally equalize

• Inflation increases at a greater rate than demand