Inflation Explained

What is one cause of inflation?

• Increase in the money supply

• Decrease in the money supply

• Stable interest rates

How does inflation affect the purchasing power of money?

• Inflation increases the purchasing power of money.

• Inflation has no effect on the purchasing power of money.

• Inflation decreases the purchasing power of money.

What is one type of inflation based on the rate of increase?

• Hyperinflation

• Deflation

• Stagflation

How is inflation measured in an economy?

• Stock Market Index

• Consumer Price Index (CPI)

• Unemployment Rate

What is one way to control inflation?

• Increase interest rates

• Print more money

• Reduce taxes

Can you provide an example of inflation in history?

• French inflation in the 1940s

• Russian inflation in the 19th century

• impact of COVID

What happens to prices during inflation?

• Prices tend to rise

• Prices tend to go down

• Prices remain stable

What is one effect of inflation on the economy ?

• No impact on $

• higher cost of food, gas and utilities

• Higher purchasing power

What is one historical example of demand-pull inflation?

• Oil crisis of the 1970s

• Dot-com bubble burst

• Great Depression

How does inflation impact the cost of living for people?

• Inflation increases the cost of living by changing the purchasing power of money.

• Inflation has no impact on the cost of living.