inflation

1. What is inflation generally defined as?

2.  

 

• a decrease in production

• a persistent and appreciable rise in general price level

• an increase in wages only

• a temprorary increase in prices

Which one of the following is not a type of inflation

• demand pull inflation

• cost pull inflation

• cyclical inflation

• built in inflation

What does the consumer price index (CPI) track

• prices producers pay for raw materials

• prices for common goods and sevices like food and housing

• prices of luxury items

• the wages of workers

What happens during demand pull inflation

• the cost of raw material rises

• producers charge more for goods

• there is more demand for products than supply

• buisnesses lower their prices

Which type of inflation is caused by increasing production costs?

• demand pull inflation

• built in inflation

• cost of inflation

• deflation

How does the government typically try to reduce inflation?

• by lowering intrest rates

• by reducing money suppy

• by increasing wages

• by encouraging spending

What happens when government prints too much money?

• value of money increases

• cost of goods decreases

• value of money drops leading to higher prices

• inflation decreases

What is the key characteristic of inflation as mentioned in the document?

• it is a temprorary state

• it is a persistent and prolonged rise in prices

• it only affects luxury goods

• it is a sudden rise in wages

Which is the key causes of inflation according to the document?

• decrease in consumer demand

• shortages of important materials like oil

• increase in unemployment rates

• surplus of raw materials