Why do most developed governments aim for a 1% to 3% inflation rate?
Is Hyperinflation Coming?: Is Inflation Good or Bad

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Business, Religious Studies, Other, Social Studies
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7th - 12th Grade
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Hard
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5 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To reduce the value of savings
To maintain economic stability
To encourage deflation
To make goods more expensive
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a direct consequence of deflation on debt?
It encourages more borrowing
It makes debt repayments easier
It increases the real interest rate
It reduces the nominal interest rate
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does deflation affect businesses' approach to wages?
Businesses are more generous with pay raises
Businesses offer higher initial salaries
Businesses increase the minimum wage
Businesses are less generous with pay raises
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is one potential outcome if deflation were to occur in a minimum wage environment?
Minimum wage would increase annually
Businesses would hire more workers
Minimum wage might need to decrease
Workers would receive more benefits
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why is moderate inflation considered better than deflation?
It supports economic growth and stability
It encourages saving over spending
It leads to lower wages
It reduces the cost of goods
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