Understanding Inflation

The video explores the global phenomenon of inflation, focusing on personal experiences and the causes behind it, such as COVID-19 and supply-demand imbalances. It explains how inflation is measured using the Consumer Price Index (CPI) and analyzes the rising costs of specific goods like diapers. The video delves into business costs, markups, and corporate strategies that influence prices. It concludes with potential solutions to combat inflation, including raising interest rates and policy changes.

What personal item does the narrator mention to highlight the impact of inflation?

• Groceries

• Diapers

• Gasoline

• Clothing

What is the basic economic principle often cited as a cause of inflation?

• High unemployment rates

• Low interest rates

• Too few goods chasing too much money

• Too much money chasing too few goods

Who is the economist mentioned in the video that has been warning about inflation?

• Ben Bernanke

• Janet Yellen

• Larry Summers

• Paul Krugman

What does the US Bureau of Labor Statistics use to measure inflation?

• Consumer Price Index (CPI)

• Producer Price Index (PPI)

• Unemployment Rate

• Gross Domestic Product (GDP)

Which of the following is NOT a category included in the Consumer Price Index (CPI)?

• Housing

• Electricity

• Diapers

• Apparel

What was the average unit price for diapers in 2019?

• 21 cents

• 19 cents

• 17.4 cents

• 16.1 cents

What material is NOT mentioned as a component in the production of diapers?

• Plastic

• Wood pulp

• Petroleum

• Cotton

What percentage of all diapers produced in the US are made by two companies?

• 80-90%

• 70-80%

• 60-70%

• 50-60%

Which company is NOT mentioned as a major producer of diapers in the US?

• Procter & Gamble

• Kimberly-Clark

• Johnson & Johnson

• None of the above

What is one of the tools the Federal Reserve uses to combat inflation?

• Lowering taxes

• Raising interest rates

• Increasing government spending

• Reducing tariffs