Inflation and Deflation 1

What does inflation effect?

• Supply and Demand

• Only houses

• All generally purchased items

• Only groceries 

Hyperinflation is?

• inflation is in control

• inflation is steady 

• inflation is going out of control

• inflation is being managed

Hyperinflation is when inflation goes out of control. What is one effect of hyperinflation? 

• People's purchasing power goes up.

• People's purchasing power goes down.

• Purchasing power stays the same, but the value of money goes up. 

What does the CPI measure? 

• It measures the pressure that the market is under. 

• It measures how much millionaires pay for their investments. 

• It measures how consumers invest their money. 

• It measures how much average people spend on everyday goods.

How often are the CPI categories updated? 

• 10 years

• 10 months

• 6 months

• A fiscal year

CPI looks at how many categories?

• 16

• 1

• 8

• 2

Inflation is always a bad thing. 

• True

• False

What country had major HYPERINFLATION in 2007-2008?

• USA

• Germany

• Zimbabwe

• China

• Dubai

Inflation can be caused by producers having to increase expenses to create their products. 

• True

• False

Who is most affected by inflation? 

• Everyone

• Only businesses 

• People on fixed income (income that doesn't change)

• People who's income changes a lot