inflation theme 2 edexcel

Inflation is defined as a __________ rise in the general price level

Which of the following types of inflation is caused by increasing consumer spending?

• Demand-pull

• cost-push

Cost push inflation is shown on an AD/AS diagram with a shift _____ in the ______

• left, AD

• Left, AS

• Right, AD

• Right, AS

Which of the following are measurements of inflation?

• CPI

• RPI

• KPI

Which of the following are not true about the process used to calculate the CPI

• it includes both goods and services

• prices are collected from a range of outlets

• goods/services are weighted according to the frequency they are purchased

• it doesn't include mortgage interest payments and council tax

The costs involved in moving money around to find the best interest rate are...

• a fall in the value of money

• menu costs

• shoeleather costs

• a loss of international competitiveness

If economic growth is 5% and inflation is 3.8%, by how much has the economy grown in real terms?

• 8.8%

• 5%

• 3.8%

• 1.2%

• -1.2%

A fall in the rate of inflation is know as_______

high inflation is bad for economy because...

• Things costs more

• A higher amount of income has to be spent on raw materials

• people are paid more

Which of the following would not reduce inflationary pressure?

• supply side policies

• expansionary monetary policy

• contractionary monetary policy

• expansionary fiscal policy

• contractionary monetary policy