16 Questions
What does inflation refer to?
General increase in the price level of goods and services
What can contribute to inflation?
Balance between supply and demand for money
How is inflation typically expressed?
Percentage representing the annual rate at which prices are rising
How can government spending contribute to demand-pull inflation?
By increasing spending on infrastructure projects or public services
What is one factor that can lead to demand-pull inflation?
Increased consumer spending
What effect can higher levels of business investment have on inflation?
Create a demand-pull effect on prices
What is the main effect of loose monetary policies on borrowing and spending?
Increased borrowing and spending
What is the primary cause of cost-push inflation?
Rising input costs
Which index measures the average change in prices paid by consumers for goods and services over time?
Consumer Price Index (CPI)
What is another name for built-in inflation?
Wage-price inflation
Which factor can directly impact production costs?
Increased costs of raw materials
What can disrupt the supply chain, causing shortages and increased costs?
Natural disasters
What is the measure that evaluates the average change over time in the selling prices received by domestic producers for their output?
Producer Price Index (PPI)
What is the main factor leading to built-in inflation?
Rising wages
What is the primary cause of moderate inflation in an economy?
A sustained increase in the general price level of goods and services over time.
What leads to a continuous and self-sustaining increase in prices in an economy?
Rising wages
Test your knowledge of the economic concept of inflation, which refers to the general increase in the price level of goods and services over time. Learn about the factors contributing to inflation and its impact on currency values.
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