Exploring Inflation and Economic Bubbles

What does a rise in prices effectively equate to?

• An increase in savings

• No change in financial status

• A decrease in wages

• An increase in wages

What is the Consumer Price Index (CPI) used for?

• Calculating interest rates

• Measuring inflation

• Calculating the GDP

• Measuring unemployment rates

Which country experienced nearly 70% inflation rate at the end of 2014?

• Japan

• Venezuela

• United States

• Ireland

What causes Demand Pull Inflation?

• A decrease in consumer demand

• A surplus of goods in the market

• Too much money chasing too few goods

• Decrease in production costs

What is a significant cause of Cost Push Inflation?

• An increase in demand for goods

• An increase in money supply

• A decrease in taxes

• A decrease in the availability of a key resource

What was the cause of the housing price bubble in the early 2000s?

• A decrease in demand for houses

• A shortage of building materials

• Low interest rates and deceitful lending practices

• A sudden increase in population

What is an economic bubble?

• An unsustainable increase in the price of assets

• A period of rapid economic growth

• A stable economic period

• A decrease in the price of goods

What does NINJA stand for in the context of loans?

• National Interest, No Jobs, Ample assets

• No Income, No Job, and Assets

• New Investment, No Job Agreement

• No Interest, No Jobs, and No Assets

What was the granddaddy of all bubbles?

• The stock market crash of 1929

• The housing market bubble

• Dutch tulip mania

• The dot-com bubble

Why is understanding inflation important for individuals?

• To choose investment portfolios

• To negotiate wages adjusted for inflation

• To predict stock market trends

• To understand global economics