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Inflation - stability is everything! Flashcards | StudBud

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Inflation - stability is everything!

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What do you know about inflation? This quiz explains how it affects us all and how central banks fight too high inflation. https://www.ecb.europa.eu/ecb/educational/explainers/tell-me-more/html/what_is_inflation.en.html?utm_source=quiz&utm_medium=description+&utm_campaign=2301_quiz #banking #banks #finance #economics #interest #inflation

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Questions 9

Answers

1
What does the term ''inflation'' describe?
The price of money
How fast the economy is growing
A broad increase in prices
The increase of government debt
2
What causes perceived inflation to be higher than measured inflation?
Prices for what you buy can change more than average prices
All answers are correct
Prices of everyday goods may change more than prices in general
Price rises are more noticeable than decreases or stable prices
3
We usually perceive rising prices in our personal lives as:
Identical to measured inflation
Higher than measured inflation
Close to measured inflation
Lower than measured inflation
4
Inflation is measured by comparing the average price for a basket of goods and services over time.
True
False
5
What can lead to higher inflation?
An increase in prices of imported goods
A decrease in the supply of goods and services
An increase in demand for goods and services
All answers are correct
6
Too high inflation matters to everyone because (multiple answers possible):
It makes everyone better off
It can disrupt businesses over time
It can widen the gap between rich and poor
It means you cannot afford to buy as much as before
7
Interest rates can be defined as the cost of borrowing money.
False
True
8
The opposite of inflation is deflation.
False
True
9
Central banks can fight inflation by lowering interest rates.
True
False