Inflation

What is inflation?

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

A normal inflation rate is usually around ______ per year.

• One percent or less

• Two to three percent

• Four to five percent

• Six to seven percent

When inflation is high the _______________of the dollar decreases

• cost value
• purchasing power
• importance
• validity

Unanticipated, higher than normal inflation reduces our ability to spend, save and invest.

• True

• False

An index that measures the prices of a market basket of goods that typical consumers purchase.

• Consumer Price Index
• Federal Reserve
• Bank
• Deflation

When labor becomes more expensive, this can lead to a rise in prices. This is considered a type of

• demand pull inflation

• cost push inflation

Term describing when companies reduce the size or quantity of their products while charging the same price or even more

• deflation

• being a real jerk

• shrinkflation

• less is more!

This is a slowdown in growth with relatively high unemployment, during a rise in inflation.

• deflation

• economic growth

• stagflation

• stemflation

High inflation is more likely to happen during periods of high economic growth.

• True

• False

GDP that is adjusted for inflation

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