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Markets implies that pressure for price increases reaches across not just one.
Markets implies that pressure for price increases reaches across not just one.
- Deflation; most
- Inflation; all
- Inflation; most (correct)
- Deflation; all
While one occasionally sees references to inflation over short periods, the term typically implies a(n) in prices.
While one occasionally sees references to inflation over short periods, the term typically implies a(n) in prices.
- Short term decrease
- Ongoing decrease
- Ongoing rise
- Short term rise (correct)
The effects of inflation are seen in:
The effects of inflation are seen in:
- Services and wages only
- Wages and income levels only
- Goods, services, wages and income levels (correct)
- Goods and services only
Inflation implies that the level of all prices:
Inflation implies that the level of all prices:
What is the most commonly cited measure of inflation in the United States?
What is the most commonly cited measure of inflation in the United States?
When we want to measure wage inflation in the labor market, we use the:
When we want to measure wage inflation in the labor market, we use the:
The Producer Price Index is based on prices paid for supplies and inputs by:
The Producer Price Index is based on prices paid for supplies and inputs by:
The is based on the prices of merchandise that are exported or imported.
The is based on the prices of merchandise that are exported or imported.
Another term used to describe negative inflation is:
Another term used to describe negative inflation is:
In the early 1990s, extremely high inflation rates of 2500% were common in Russia. What term describes this situation?
In the early 1990s, extremely high inflation rates of 2500% were common in Russia. What term describes this situation?
What is the situation where the buying power of money in terms of goods and services increases called?
What is the situation where the buying power of money in terms of goods and services increases called?
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Study Notes
Inflation Concepts
- Markets imply pressure for price increases affects most prices, indicating general inflation trends.
- Inflation is often discussed in short-term contexts, frequently indicating a rise in prices.
Effects and Measurements of Inflation
- Inflation affects the economy broadly, including goods, services, wages, and income levels.
- All price levels increase during inflation, impacting purchasing power.
Key Indices for Measuring Inflation
- The most commonly cited measure of inflation in the United States is the Consumer Price Index (CPI).
- To measure wage inflation in the labor market, the Employment Cost Index is used.
Production and International Prices
- The Producer Price Index reflects prices paid by producers for supplies and inputs.
- The International Product Index is based on the prices of merchandise that are exported or imported.
Negative Inflation
- Deflation is the term used to describe negative inflation, indicating a decrease in the general price level.
- Hyperinflation is characterized by extremely high inflation rates, such as the 2500% rates experienced in early 1990s Russia, indicating severe economic instability.
Summary of Economic Terms
- Hyperinflation signifies a drastic fall in purchasing power, while deflation means an increase in the purchasing power of money concerning goods and services.
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