Inflation

Front

The rate of inflation is most commonly measured by use of: a price deflator, the GDP deflator, the consumer price index, all of the above

Back

the consumer price index

Front

The consumer price index measures

Back

the cost of buying a fixed basket of goods and services, and calculating how this cost changes from year to year

Front

An increase in aggregate demand is likely to lead to

Back

demand-pull inflation

Front

Demand-pull inflation and cost-push inflation differ in that

Back

demand-pull leads to higher real GDP and cost-push to lower real GDP

Front

What is inflation?

Back

Inflation is an economic term that describes a general increase in prices 📈 and a fall in the purchasing power of money 📉.

Front

A little inflation is normal and even good for a healthy economy. Inflation becomes a problem when it grows too quickly.

Back

True

Front

What causes inflation?

Back

inflation occurs when there's an increase in production costs OR when demand for products and services increases faster than supply

Front

Money supply creates inflation only when ...

Back

the money is printed faster than the economy grows.

Front

Inflation reduced people's purchasing power because

Back

the same amount of money buys fewer goods and services

Front

Who is most likely to be hurt by inflation? Options: someone who borrowed money, a retiree on a fixed income, a business owner, the U.S. government

Back

a retiree on a fixed income