Exploring the Impact of Inflation on the Economy

What did Grandma initially give Jennifer?

• A book

• A movie ticket

• A bag of popcorn

• $5

Why does Jennifer think $5 is insufficient for a movie?

• She doesn't watch movies

• It won't cover popcorn costs

• She prefers online streaming

• Tickets are free

What does inflation cause according to Grandma?

• Decrease in services quality

• Decrease in currency value

• Increase in purchasing power

• Increase in goods quantity

What example does Grandma use to explain inflation?

• Orange marmalade

• Chocolate

• Coffee beans

• Ice cream

What happens if the demand for a product increases but production remains the same?

• Price remains the same

• Production stops

• Price decreases

• Price increases

What could cause the production costs of a product to increase?

• Lower taxes

• Natural disasters

• Decreased demand

• Improved technology

How does an increase in money supply affect prices?

• No change in prices

• Decrease in prices

• Prices fluctuate

• Increase in prices

What did Grandma say about the relationship between inflation and wages?

• They decrease together

• They increase at the same rate

• They don't necessarily increase at the same rate

• Wages remain constant

Why is it important to consider inflation when saving money?

• To support the government

• To increase spending

• To maintain purchasing power

• To avoid taxes

What did Grandma suggest as a way to counter the effects of inflation?

• Borrowing more money

• Investing savings

• Spending all savings

• Keeping money under the mattress