What is purchasing power?

the financial ability to buy goods or services

What effect will high inflation have on selling Irish made goods abroad

It will be harder to sell them: sales would decrease

The formula for calculating the rate of inflation is

Cost of living Y2 - Cost of Living Y1/Cost of Living Y1 x 100

What are the dangers of high inflation

Cost of doing business increases

What effect does inflation have on purchasing power

Decreases purchasing power of individuals

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3.9 Economic Indicators: Inflation

14 termsStudBud Administration8,745 plays

This Quiz covers part of the Learning Outcome 3.9; Economic Indicators for the Junior Cycle Business Studies Course. It focuses on the indicator of inflation

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Questions 14

Answers

1
What is an ideal amount of annual inflation to have in an economy
10%
0%
2%
5%
2
What is the impact of inflation on business
All of the above
Cost of raw materials increase
Workers demand pay rises
Harder to export goods abroad
3
Inflation shows..
A general fall in prices
The rate of interest determined by the bank of England
The value of the economy
A general rise in prices
4
The CPI is the collection of goods and services whose prices are regularly compared to measure inflation
True
False
5
What is purchasing power?
not being able to buy things
having too much money in the economy
the financial ability to buy goods or services
being VERY rich
6
What effect will high inflation have on selling Irish made goods abroad
It will be harder to sell them: sales would decrease
It will be easier to sell them; sales would increase
It would make no difference: Sales would stay the same
7
The formula for calculating the rate of inflation is
Cost of Living Y1 - Cost of Living Y2/Cost of Living Y1 X 100
Cost of Living Y1 - Cost of Living Y2/Cost of Living Y2 x 100
Cost of living Y2 - Cost of Living Y1/Cost of Living Y1 x 100
Cost of Living Y2 - Cost of Living Y1/Cost of Living Y2 x 100
8
Which of the following is NOT a cause of Inflation
Demand for some goods is greater than supply
Increase in Unemployment
Increase in the price of oil
Increase in the cost of production eg. wages
9
What are the dangers of high inflation
Cost of doing business increases
New jobs are created so unemployment falls
People will save less
Irish goods will become cheaper to produce and sell abroad
10
What are the benefits of low inflation
People have more money to spend so the economy grows
Irish goods will become cheaper to produce and sell abroad
New jobs are created so unemployment falls
All of the above
11
The official measure of inflation is called
Consumer Price Inflation
Cost Price Inflation
Cost Price Index
Consumer Price Index
12
What effect does inflation have on purchasing power
Decreases purchasing power of individuals
Increases purchasing power of individuals
13
High inflation reduces an individuals purchasing power
False
True
14
Individuals save less if inflation is high
True
False

3.9 Economic Indicators: Inflation Flashcards | StudBud