Inflation 206

Two types of inflation are (select all which apply)

• demand-pull inflation.

• demand and supply inflation

• cost-push inflation

• fixed income inflation

The main reason why the price of goods and services increase overtime is because of

• government controls.

• inflation

• deflation

The group of goods and services selected and used to measure inflation is referred to as a/an

• Big Basket.

• Market Basket.

• Economic Basket.

During deflation there is too much of everything for sale, but not enough people who want or can afford to buy.

• True

• False

____________________ is a measure of price change in a selected market basket of goods and services such as gasoline, food, clothing, and automobiles.

• Demand-Pull Inflation

• Consumer Price Index (CPI)

• Deflation

• Fixed Income

James is a farmer who grows wheat. He notices that the prices of seeds is increasing, and he has to sell his crop at a higher price. What is this phenomenon called?

• Deflation

• Cost-Push Inflation

• Market Basket

• Fixed Income

____________________ is when prices are raised because demand for them is greater than supply.

• Consumer Price Index (CPI)

• Demand-Pull Inflation

• Deflation

• Fixed Income

Most countries try to maintain an inflation rate of ______ per year.

• One percent or less

• Two to three percent

• Four to five percent

• Six to seven percent

What 2 types of inflation are there?

• demand pull and cost push

• demand pull and supply glut

• supply glut and demand side

• supply inflation and demand inflation

What is inflation?

• rise in all prices

• rise in most prices

• rise in some prices

• rise in general prices