3-1 (Personal Finance)

What is inflation?

• An increase in the general level of prices for goods and services

• A decrease in the general level of prices for goods and services

• The value of all goods and services produced in a country

• A measure of the efficiency with which goods and services are made

What does the time value of money concept state?

• A dollar you receive today is worth more than a dollar you receive in the future

• Rising prices with the rate of increase slowing down

• A dollar you receive in the future is worth more than a dollar you receive today

• The value of all goods and services produced in a country

What is hyperinflation?

• A decrease in the general level of prices for goods and services

• Rapidly rising prices that are out of control

• Rising prices with the rate of increase slowing down

• High prices followed by lower prices and then high prices again

What is demand-pull inflation?

• A measure of the efficiency with which goods and services are made

• An increase in the general level of prices for goods and services

• Rising prices as a result of rising production costs

• Higher prices as a result of consumers wanting to buy more goods and services than producers supply

What is deflation?

• An increase in the general level of prices for goods and services

• Rising prices with the rate of increase slowing down

• Rapidly rising prices that are out of control

• A decrease in the general level of prices for goods and services

What is cost-push inflation?

• An increase in the general level of prices for goods and services

• Rising prices as a result of rising production costs

• A decrease in the general level of prices for goods and services

• Higher prices as a result of consumers wanting to buy more goods and services than producers supply

What is stagflation?

• A period of slow economic growth and high unemployment with rising prices

• A decrease in the general level of prices for goods and services

• Rapidly rising prices that are out of control

• An increase in the general level of prices for goods and services

What is the Consumer Price Index (CPI)?

• A measure of the efficiency with which goods and services are made

• An index measuring the average change in prices over time that consumers pay for a basket of goods and services

• The value of all goods and services produced in a country

• A decrease in the general level of prices for goods and services

What is the Producer Price Index (PPI)?

• An index measuring the average change in selling prices received by domestic producers for their output

• A measure of the efficiency with which goods and services are made

• The value of all goods and services produced in a country

• A decrease in the general level of prices for goods and services

What is the difference between nominal and real GDP?

• Nominal GDP is adjusted for inflation, while real GDP is not

• Real GDP is adjusted for inflation, while nominal GDP is not

• Both nominal and real GDP are adjusted for inflation

• Neither nominal nor real GDP is adjusted for inflation