jimmm

When government intervention makes currency worthless, this condition is called

• deflation.
• hyperinflation.
• cost-push inflation.
• demand-pull inflation.

Inflation causes money to ___ value over time.

• lose
• gain

Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States?

• Gasoline costs more to produce and purchase than tomatoes.
• Gasoline is imported from other nations at a higher rate than tomatoes.
• Americans purchase many more boxes of tomatoes than barrels of gasoline.
• Americans spend more money on gasoline than tomatoes, on average.

Typically, high inflation is a sign of

• a healthy economy because it results from a fall in production costs.
• a healthy economy because it results from a rise in consumer interest.
• a struggling economy because wages cannot keep up with the increase in prices.
• a struggling economy because it results from a fall in consumer interest.

Typically, low inflation is a sign of

• a healthy economy because it results from a steady rise in demand.
• a healthy economy because it results from a steady rise in supply.
• a struggling economy because it results from a steady fall in demand.
• a struggling economy because it results from a steady fall in supply.

Typically, low inflation is a sign of

• a healthy economy because it results from a steady rise in demand.
• a healthy economy because it results from a steady rise in supply.
• a struggling economy because it results from a steady fall in demand.
• a struggling economy because it results from a steady fall in supply.

Hyperinflation can occur when

• consumers begin purchasing more goods.
• producers need more money to make and distribute goods.
• companies raise prices to pass on costs to consumers.
• the government prints a ton of money in order to pay off its debt.

Which is an effect of stagflation?

• Trade with other economies increases.
• The value of a country’s currency drops.
• Prices for goods fall sharply and suddenly.
• The GDP rises along with production levels.

How does demand-pull inflation differ from cost-push inflation?

• Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.
• Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers.
• Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government.
• Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.

Stagflation occurs when high inflation combines with

• high unemployment and a low level of production.
• low unemployment and a high level of production.
• a drop in buying power and a rise in workers’ wages.
• a rise in buying power and a drop in workers’ wages.