ECO120

What is the relationship between inflation and unemployment?

• higher inflation can lead to lower unemployment

• There is no relationship between inflation and unemployment

• Higher inflation always causes higher unemployment

• Lower inflation leads to higher unemployment, and higher inflation leads to lower unemployment

What economic policy is typically used to combat high inflation?

• Expansionary fiscal policy (increasing government spending)

• Loose monetary policy (lowering interest rates)

• Tight monetary policy (raising interest rates)

• Increasing taxes

Which of the following is a type of unemployment?

• Structural inflation

• Frictional unemployment

• Inflationary unemployment

• Cost-push unemployment

What happens when there is high inflation?

• Interest rates go down

• The number of jobs decreases

• The value of money goes up

• The cost of living goes up

What is a common effect of high unemployment?

• Inflation rates drop significantly

• People have less money to spend.

• Prices for goods and services decrease

• Interest rates rise quickly

Which of the following is an example of structural unemployment?

• A worker loses their job due to changes in technology

• A worker is temporarily unemployed while looking for a new job

• A worker loses their job during a recession

• A worker is unemployed because they do not have the necessary skills

What does “deflation” mean?

• An increase in the cost of living

• A decrease in the price of goods and services

• A rise in the number of jobs available

• A decrease in the unemployment rate

What is inflation?

• A rise in unemployment rates

• An increase in the price of goods and services over time

• A fall in interest rates

• A decrease in the price of goods and services

Which of the following is a common measure of inflation?

• Unemployment Rate

• Gross Domestic Product (GDP)

• Interest Rate

• Consumer Price Index (CPI)

Which of the following is NOT a common cause of inflation?

• A decrease in the cost of raw materials

• Increased government spending

• Rising wages

• Higher demand for goods and services