Economics

What is the main reason why money is valuable in an economy?

• Money is a symbol of power
• Money can be used to purchase goods and services
• Money has inherent value
• Money is a representation of economic well-being

Which of the following is a reason why inflation doesn't happen as much now?

• Companies are paying lower wages to employees
• Companies are hiring more people due to automation
• Companies are paying higher wages to employees
• Companies are hiring fewer people due to automation

What is the definition of deflation?

• A rise in the value of money
• A decrease in the price of goods and services
• A loss of confidence in the economy
• An increase in the price of goods and services

Why is deflation considered bad for the economy?

• It leads to an increase in the value of money
• It results in higher wages for employees
• It leads to unemployment and reduced spending
• It causes companies to lower prices

Why do companies have to keep lowering prices during deflation?

• To increase their profits
• To attract more customers
• To reduce their debt
• To stimulate spending

Which of the following is NOT a reason why inflation happens?

• Companies raise prices to out-compete their competitors
• People have more money and want to buy more things
• Workers demand higher wages due to high demand
• Companies need to increase production and hire more people

What is the ideal target for inflation according to central banks?

• One percent
• Zero percent
• Two percent
• Three percent

What is the main concern when inflation leads to hyperinflation?

• People are unable to save money
• Prices rise too quickly
• Money loses value rapidly
• People can no longer buy anything

Which action can governments take to prevent a company from failing during a recession?

• Bailout
• Investment
• Bankruptcy
• Market self-correction

What is the difference between a bailout and a bail-in?

• In a bailout, the government pays off the company's debt, while in a bail-in, the debt is cancelled.
• A bailout and a bail-in are the same thing.
• A bailout and a bail-in are actions taken by individuals, not governments.
• In a bailout, the debt is cancelled, while in a bail-in, the government pays off the company's debt.