Inflation Revisited

What is inflation?

• rise in all prices

• rise in most prices

• rise in some prices

• rise in general prices

Nominal wage adjusted for inflation is described as

• Living wage

• RPI

• Real wage

• Constant prices

How is inflation measured?

• By comparing average prices of all goods and services produced

• Consumer Price Index

• Producer Price index

• Government Price Index

Do you remember the accurate formula of Inflation Rate (%)?

• CPI Current Year - CPI Previous Year x 100%

  CPI Current Year

• CPI Previous Year - CPI Current Year x 100%

  CPI Current Year

• CPI Previous Year - CPI Current Year x 100%

  CPI Previous Year

• CPI Current Year - CPI Previous Year x 100%

  CPI Previous Year

If the CPI is 93 in 2017 and 97 in 2018, calculate the rate of inflation from 2017 to 2018.

• 4.3%

• 4.12%

• 4%

• 5.1%

• None of the answers

What is the UK target rate of inflation?

• 1%

• 2%

• 3%

• 4%

Inflation

• Always reduces the cost of living

• Always reduces the standard of living

• Reduces the price of products

• Reduces the purchasing power of a pound

What cause of inflation comes from an increase in commodity prices such as oil and wheat, or an increase in wages?

• Cost-push inflation

• Demand-pull inflation

• Price-push inflation

• Supply-pull inflation

• None of the answers

Inflation caused by an increase in consumption would be classified as..

• Demand pull

• Demand push

• Cost push

• Cost pull

Which of the following would cause Demand Pull inflation

• An increase in the price of oil

• A depreciation in the exchange rate

• A cut in government spending

• An Increase in taxation