Inflation Quiz

What is inflation?

• A rise in the general price level of goods and services over a period of time

• A rise in the purchasing power of currency

• A decrease in the general price level of goods and services over a period of time

• A decrease in the purchasing power of currency

What happens to purchasing power when the price level increases?

• Purchasing power increases

• Purchasing power decreases

• Purchasing power remains the same

• Purchasing power fluctuates

What causes inflation?

• Orange marmalade

• A decrease in the demand for goods and services

• An increase in the demand for goods and services

• An increase in the production of goods and services

How does a decrease in the production of a commodity affect its price?

• The price increases

• The price fluctuates

• The price remains the same

• The price decreases

What happens to prices when the money supply increases?

• Prices increase

• Prices remain the same

• Prices decrease

• Prices fluctuate

Why is it important to account for inflation in saving goals?

• Money put aside today will have more purchasing power in the future

• Money put aside today will have less purchasing power in the future

• Saving goals should only be based on current prices

• Inflation has no impact on saving goals