Understanding Inflation

What is the primary tool used to measure inflation?

• Unemployment Rate

• Interest Rates

• Consumer Price Index

• Gross Domestic Product

How does a small amount of inflation benefit an economy?

• It decreases the value of currency.

• It indicates economic growth.

• It leads to higher unemployment.

• It causes deflation.

What was a major cause of hyperinflation in Zimbabwe?

• High interest rates

• Excessive money printing

• Low consumer demand

• Increased exports

What was the rate of inflation in the UK in the 12 months to March 2022?

• 3%

• 10%

• 5%

• 7%

What impact does higher inflation in the UK compared to other countries have on UK goods?

• Makes UK goods cheaper globally

• Increases demand for UK goods

• Makes UK goods more expensive globally

• Has no impact on UK goods