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"Money Matters: Understanding Inflation" Flashcards | StudBud
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"Money Matters: Understanding Inflation"
"Money Matters: Understanding Inflation"
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Questions
15
Answers
1
Which of the following is NOT a method to combat demand-pull inflation?
Increasing interest rates
Reducing government spending
Printing more money
Increasing taxes
2
Which of the following is a measure of inflation?
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Unemployment Rate
Interest Rate
3
Which of the following is a cause of demand-pull inflation?
Improved technology
Decreased money supply
High demand for goods and services
Increased production costs
4
"Inflation is the general decrease in prices of goods and services over time." Is this statement True or False?
False
True
5
What is inflation?
A general increase in prices of goods and services
A general increase in unemployment
An increase in exports
A decrease in the production of goods
6
True/False:
Inflation always benefits everyone in the economy.
False
True
7
Which policy is typically used to combat demand-pull inflation?
Contractionary fiscal policy
Expansionary fiscal policy
Contractionary monetary policy
Expansionary monetary policy
8
True/False:
In the AD & AS model, demand-pull inflation occurs when AD increases faster than AS.
False
True
9
In an aggregate demand and supply diagram, demand-pull inflation is shown by:
A leftward shift of the aggregate supply curve
A rightward shift of the aggregate demand curve
A rightward shift of the aggregate supply curve
A leftward shift of the aggregate demand curve
10
Which factor can lead to demand-pull inflation?
A reduction in interest rates
A decrease in government spending
An increase in taxes
A decrease in consumer confidence
11
True/False:
On a demand-supply diagram, a rightward shift of the AD will decrease the equilibrium price level.
False
True
12
True/False:
Increasing interest rates is a way to combat demand-pull inflation.
False
True
13
An increase in consumer spending can cause demand-pull inflation. Is this statement True or False?
True
False
14
True/False:
Demand-pull inflation is caused by a decrease in aggregate demand.
False
True
15
What happens to the price level when there is demand-pull inflation?
It increases
It remains constant
It fluctuates randomly
It decreases
