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Questions and Answers
What is inflation?
What is inflation?
- An increase in the production of goods and services in an economy
- A sustained increase in average price level of all goods and services produced in an economy (correct)
- A sustained decrease in average price level of all goods and services produced in an economy
- A decrease in the production of goods and services in an economy
What is deflation?
What is deflation?
- An increase in the production of goods and services in an economy
- A sustained decrease in average price level of all goods and services produced in an economy (correct)
- A sustained increase in average price level of all goods and services produced in an economy
- A decrease in the production of goods and services in an economy
What does CPI measure?
What does CPI measure?
- The changes over time in the average income of consumers
- The changes over time in general level of retail prices of selected goods and services that households purchase for the purpose of consumption (correct)
- The changes over time in the production of goods and services in an economy
- The changes over time in the level of unemployment in an economy
