WorksheetsInflation
Total questions: 15
Worksheet time: 8mins
Identify which of the following situations best explains a cause of cost-push inflation.
A decrease in interest rates
An increase in production costs
A decrease in consumption spending
An increase in private investment
Identify which of the following situations best explains a cause of demand-pull inflation.
A decrease in the labour force
A decrease in consumption spending
An increase in interest rates
An increase in government spending
What do we call it when the rate of inflation decreases?
Disinflation
Deflation
Hyperinflation
Galloping inflation
What type of inflation is represented here? (Please disregard the fact that LRAS is not shown)
Demand-pull inflation
Cost-push inflation
Hyperinflation
Deflation
(HL) The weighted price index of year 1 was 104.3, and that of year 2 was 112.6. What was the rate of inflation between the two years?
8.3%
7.37%
-7.37%
7.95%
Which of the following is not a likely effect on a country if it is experiencing a high level of inflation?
Increased real value of savings
Demand for higher wages
Decreased investments
Higher interest rates
(a) inflation happens when SRAS falls below AD.
In an inflationary spiral, what causes SRAS to shift inwards?
Interest rates start rising
Consumption increases
Workers demand higher wages, increasing costs of production
Savings decrease
Which is not a consequence of inflation?
Reduction in international competitiveness (net exports decrease)
Disproportional effect on low-income earners
Increase in nominal interest rates
Higher cyclical unemployment
According to Keynesian economists, does an increase in AD necessarily lead to demand-pull inflation?
Yes, always.
Yes, but only if the economy is operating close to or at full employment.
No, never.
What type of inflation best corresonds to the headlines shown?
Demand-pull inflation
Cost-push inflation
What type of inflation best corresonds to the headlines shown?
Demand-pull inflation
Cost-push inflation
What is the U.S. Federal Reserve's inflation goal/target?
0%
1%
2%
3%
Which of the following is NOT a consequence of deflation?
Postponement of consumption and investment
Increase in the real value of debt
Unemployment
Rising interest rates
The Consumer Price Index report for September 2022 showed inflation between September 2021, and September 2022. Inflation was ___%
0.4
7.2
8.2
8.7
