Podcast
Questions and Answers
How is inflation usually measured?
How is inflation usually measured?
- Using the gross domestic product (GDP)
- Using the unemployment rate
- Using the consumer price index (CPI) (correct)
- Using the producer price index (PPI)
What is inflation?
What is inflation?
- A reduction in the demand for goods and services
- A decrease in the general price level of goods and services
- A general increase in the prices of goods and services in an economy (correct)
- An increase in the purchasing power of money
What corresponds to a reduction in the purchasing power of money?
What corresponds to a reduction in the purchasing power of money?
- Inflation (correct)
- GDP growth
- Stable prices
- Deflation
What is the opposite of CPI inflation?
What is the opposite of CPI inflation?
What is the common measure of inflation?
What is the common measure of inflation?
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Study Notes
Inflation Measurement and Concept
- Inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.
- Inflation corresponds to a reduction in the purchasing power of money.
- The Consumer Price Index (CPI) is the common measure of inflation, which tracks the average change in prices of a basket of goods and services.
- The opposite of CPI inflation is deflation, which is a decrease in the general price level of goods and services over time.
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