7.1 Inflation Quiz

What is inflation?

• A) A decrease in the general price level of goods and services

• B) An increase in the general price level of goods and services

• C) A decrease in the supply of goods and services

• D) An increase in the supply of goods and services

Why is price stability important?

• A) It encourages businesses to invest and expand production

• B) It discourages businesses from investing

• C) It has no impact on economic growth

• D) It only affects the prices of luxury goods

What does CPI stand for?

• A) Consumer Price Index

• B) Consumer Product Index

• C) Consumer Price Information

• D) Consumer Product Information

What does the CPI measure?

• A) The level of prices of a selection of consumer goods and services over time

• B) The total production of goods and services in an economy

• C) The employment rate in an economy

• D) The total income of consumers in an economy

Which agency in Australia measures the CPI?

• A) Australian Bureau of Statistics

• B) Australian Bureau of Economics

• C) Australian Bureau of Finance

• D) Australian Bureau of Commerce

What is included in the "market basket" used to calculate the CPI?

• A) Food, clothing, housing, transport, health, and education

• B) Only food and clothing

• C) Only housing and transport

• D) Only health and education

In the example provided, what are the two products used to calculate the CPI?

• A) Bread and milk

• B) Bread and butter

• C) Milk and cheese

• D) Bread and eggs

What is the price of bread in 2021 according to the example?

• A) $2

• B) $2.50

• C) $2.70

• D) $3

How is the cost of the market basket calculated for 2020?

• A) ($2 x 10 loaves of bread) + ($3 x 2 litres of milk)

• B) ($2.50 x 10 loaves of bread) + ($3.50 x 2 litres of milk)

• C) ($2.70 x 10 loaves of bread) + ($3.70 x 2 litres of milk)

• D) ($3 x 10 loaves of bread) + ($3.50 x 2 litres of milk)

What is the CPI for the base year 2020?

• A) 100

• B) 123.08

• C) 132.31

• D) 110