Inflation Presentation Review

What is inflation?

• A steady price level in an economy

• A general decrease in the overall price level in an economy

• A general increase in the overall price level in an economy

• A decrease in the value of currency

What is the most common measure of inflation?

• Consumer Price Index (CPI)

• Producer Price Index (PPI)

• Gross Domestic Product (GDP)

• Retail Price Index (RPI)

What is the difference between nominal and real measurements?

• Nominal measurements and real measurements are both affected by inflation

• Nominal measurements and real measurements are the same

• Nominal measurements do not account for outside factors, while real measurements account for inflation and price changes

• Nominal measurements account for inflation and price changes, while real measurements do not

What is demand-pull inflation caused by?

• Decreasing demand

• Increased production costs

• Steady economic conditions

• Increasing demand

What is the result of cost-push inflation?

• Increased uncertainty

• Decreased production and GDP

• Rising interest rates

• Increased trade with other economies

What is hyperinflation?

• A decrease in the value of currency

• A steady increase in prices over time

• A general decrease in the overall price level in an economy

• A rapid and extreme increase in prices

What are the effects of high inflation on the economy?

• Increased production and GDP

• Decreasing trade with other economies

• Banks grant more loans

• Real incomes rise

What is the inflationary spiral also known as?

• Falling inflation caused by unemployment

• Continuous inflation that is caused by wage increases

• Increased government spending caused by positive expectations

• Stagflation

What are the effects of stagflation on the economy?

• Rising interest rates

• Steady economic conditions

• Reducing the value of currency

• Increased production and GDP

What is the cause of cost-push inflation?

• Rising production costs

• Steady economic conditions

• Decreased production costs

• Increased demand