WorksheetsInflation Basics New Zealand Focus
Total questions: 10
Worksheet time: 6mins
Define Inflation
Inflation is when the price of goods and services increases rapidly
Inflation is a sustained increase in the general price level of a nation over a period of time.
Inflation is when your're better to burn your money than spend it
Inflation is when there is no point in saving any more
Our inflation target / goal is
no inflation at all
inflation between 1-3%
To avoid hyper inflation
NZ learned to manage inflation when it
took over the printing of money from banks
joined a free trade agreement with Australia and China
got rid of the gold standard for money
instructed the reserve bank to control the OCR to manage inflation
If there is too much inflation... (select as many as apply)
people lose the value in their savings
prices are unpredictable
business lose confidence
people save instead of spend
In the 1970's which New Zealand Prime Minister mandated a wage and price freeze to solve inflation?
Helen Clark
Joseph Michael Savage
Robert Muldoon
David Lange
Monetary Policy is
The use of interest rates to control inflation
The printing of money to control inflation
The rules that banks have to follow to solve inflation
The use of government funds to combat inflation
A little bit of inflation is good because (tick all that apply)
It frees up money supply
It allows for more economic growth
It means that risk is always a part of being an entrepreneur
It stops people saving and makes them spend
Too much inflation is bad because (tick all that apply)
People can't save their money
The prices of goods and services increase too fast
Businesses are likely to pay high interest rates on loans
Consumers save their money and are afraid to spend
New Zealand aims to have inflation between
0-3%
1-4%
2-3%
1-3%
Lower interest rates (select all that apply)
increase borrowing
decrease the exchange rate
make it cheaper to borrow
make it easier to export goods
