Inflation and Deflation

Which price indices are used to interpret the rate of inflation?

• RPI and CPI

• GDP and GNP

• WPI and IIP

• Current and Constant

Which GDP take into account inflation?

• Real and constant

• Absolute and relative values

• Fixed and variable values

• Nominal and current

Which GDP values do NOT take into account inflation?

• Constant and current prices

• Nominal and real prices

• Fixed and flexible prices

• Wholesale and retail prices

Which of the following is a cause of inflation?

• Demand pull

• Cost push

• Both A and B

Which of the following is an impact of inflation on firms?

• Uncertainty

• Loss of international competitiveness

• Both A and B

Which of the following is an impact of inflation on individuals?

• Loss of real income

• Savers and borrowers

• Both A and B

Inflation is defined as the rate of change in the ________ over time.

• average price level

• unemployment rate

• interest rate

• money supply

Which of the following best describes inflation?

• The sustained increase in the cost of living / fall in the purchasing power of money

• The decrease in the average price level over time

• The increase in the value of money

• The reduction in the cost of goods and services

Which of the following is a measure of inflation?

• Consumer Prices Index (CPI)

• Gross Domestic Product (GDP)

• Unemployment Rate

• Interest Rate

Which index is the preferred measure and the Bank of England target?

• Retail Prices Index (RPI)

• Consumer Prices Index (CPI)

• Producer Price Index (PPI)

• Exchange Rate Index