Economics Concepts Quiz

What is deflation?

• A situation where inflation is high, economic growth is slow, and unemployment remains high.

• A measure of the average change in selling prices received by domestic producers.

• An increase in the general price level of goods and services over time.

• A decrease in the general price level of goods and services over time.

What does the Consumer Price Index (CPI) measure?

• Changes in the price level of a market basket of consumer goods and services.

• The rate at which the general level of prices for goods and services is rising.

• The average change in selling prices received by domestic producers.

• The level of prices of all new, domestically produced, final goods and services.

What is hyperinflation?

• Inflation caused by an increase in production costs.

• Inflation that occurs when aggregate demand exceeds aggregate supply.

• Extremely rapid and out-of-control inflation, typically exceeding 50% per month.

• A moderate and steady increase in the general price level of goods and services.

What is the base year used for?

• To track changes in the cost of living over time.

• To measure the level of prices of all new, domestically produced, final goods and services.

• To measure the average change in selling prices received by domestic producers.

• As a reference year for comparing prices of goods and services in other years.

What is demand-pull inflation?

• Inflation that occurs when aggregate demand exceeds aggregate supply.

• Inflation caused by an increase in production costs.

• A decrease in the general price level of goods and services over time.

• A situation where inflation is high, economic growth is slow, and unemployment remains high.

Who are creditors?

• A representative collection of goods and services used to calculate a price index.

• A measure of the average change in selling prices received by domestic producers.

• Individuals or entities who lend money or extend credit.

• Individuals or entities who owe money or have incurred debt.