Understanding Inflation and Interest Rates

Why is it important to understand inflation and interest rates?

• To make better shopping lists

• To manage finances effectively

• To increase grocery expenses

• To avoid paying taxes

What does a rise in the Consumer Price Index (CPI) indicate?

• A decrease in housing costs

• An increase in the value of money

• A rise in inflation

• A drop in interest rates

How does high inflation affect monthly budgets?

• It increases savings interest rates

• It lowers the cost of loans

• It reduces the purchasing power of money

• It makes dollars buy more

What is the Federal Reserve's current stance on interest rates?

• They have no control over interest rates

• They are increasing rates aggressively

• They are waiting for clear signs of inflation decrease

• They are rapidly lowering rates

Why is it crucial to stay informed about economic trends?

• To make uninformed decisions

• To plan finances better and stretch resources

• To ignore financial management

• To increase spending without concern