Price stability 2

Which group is most likely to suffer during high inflation?

• borrowers

• importers

• producers

• fixed wages earners

The macroeconomic objective of price stability means an inflation rate of?

• 0%

• 1%

• 2% - 3%

• 4%

Why might AD increase when a country's price level falls?

• Domestic interest rates will tend to fall

• Imports become more price competitive

• Real incomes fall

• The purchasing power of savings falls

Which approach would a government be most likely to use to eliminate deflation?

• an increase in direct taxes

• an increase in interest rates

• a reduction in indirect taxes

• a reduction in its budget surplus

Items included in the regimen are based on a survey of spending patterns of which group?

• pensioners

• metropolitan employees

• self-employed

• all answers

CPI stands for .....

• Costumer Price Inflation

• Costumer Price Index

• Costumer Price Indicator

• Costumer Price Image

Inflation is a sustained rise in....

• prices

• costs

• general prices

• spending

Cost - push inflation relates to....

• supply factors

• demand factors

• a stronger currency

• the demand factors

A government is faced with rising inflation. It wishes to reduce inflationary pressure while avoiding a fall in output.

Which action is most likely to meet its needs?

• an increase in laws to promote competition

• an increase in taxation

• an increase in the budget surplus

• an increase in the exchange rate

Wage pressure typically relate to which inflation type?

• demand - push

• cost - push

• imported

• cost - pull