What is purchasing power?

The ability to purchase goods and services

How would you describe hyperinflation?

Inflation that is out of control

What is the definition of Inflation?

A general increase in prices across an economy

What does the quantity theory of inflation state?

Too much money in the economy causes inflation

What is the definition of a fixed income?

A person’s income that does not change

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Inflation

20 termsStudBud Administration4,914 plays

All about inflation, effects, causes, and price indexes.

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Questions 20

Answers

1
Core Inflation Rate is the rate of inflation excluding foods and energy costs
False
True
2
Price levels rise when demand exceeds supply at current prices
False
True
3
What is purchasing power?
The ability to purchase goods and services
Inflation that is out of control
A representative collective of goods and services
Buying super powers
4
What does inflation do?
Increases prices
Decreases purchasing power
Shrinks value of products
All of the above
5
What does CPI stand for?
Communist page instigator
Computer price intake
Consumer price index
Cold paid interest
6
How would you describe hyperinflation?
A kind of inflation rate
Inflation that is under control
Something created by banks
Inflation that is out of control
7
When Inflation rises to 5% or higher there is no change in the economy
True
False
8
What causes inflation?
Changes in aggregate demand
All of the above
Growth of the money supply
Changes in aggregate supply
9
What is the current inflation rate?
2.8%
1.5%
2.7%
2.0%
10
What is the definition of Inflation?
A decrease in prices across an economy
A general increase in prices of taxes
A decrease in prices of taxes
A general increase in prices across an economy
11
Those living on a fixed income aren't hit hard during an inflation
True
False
12
What does the quantity theory of inflation state?
All of the above
Too much money in the economy causes inflation
Not enough money in the economy causes inflation
Businesses in the economy causes inflation
13
What does price indexes do?
Help consumers and businesspeople make economic decisions
All of the above
Making policy decisions
Compare costs
14
Hyperinflation is the worst kind of inflation
True
False
15
What is the definition of a fixed income?
Income that is the same for everyone
A person’s income that does not change
An amount of money that everyone is given
An income that increases/decreases if prices goes up
16
CPI is determined by measuring the price of a standard group of goods
False
True
17
What causes deflation?
An average drop in price level
A huge drop in price level
When you cut down on spending
Rise in price level
18
Which year was inflation the highest?
2001
2000
2008
2017
19
At what rate does inflation not typically cause problems for the economy?
1-3%
0%
5%
2-4%
20
What effects does inflation cause?
Decreases purchasing power
Increases prices
All of the above
Shrinks value of products

Inflation Flashcards | StudBud