Inflation and Stagflation

Question 1

Typically, high inflation is a sign of

Revolt · Accepted Answer

a struggling economy because wages cannot keep up with the increase in prices.

Question 2

The graph shows changes in the US economy between 1971 and 2001.According to the graph, 1971 to 1976 was a period of stagflation due to

Revolt · Accepted Answer

rising unemployment and inflation.

Question 3

What are the signs of high inflation? Check all that apply.Production begins to fall.Production begins to rise.Interest rates decrease.Interest rates increase.Purchasing power falls.Fewer fixed rate bank loans.

Revolt · Accepted Answer

Production begins to fall.; Interest rates increase.; Purchasing power falls.; Fewer fixed rate bank loans.

Question 4

Typically, low inflation is a sign of

Revolt · Accepted Answer

a healthy economy because it results from a steady rise in demand.

Question 5

How does demand-pull inflation differ from cost-push inflation?

Revolt · Accepted Answer

Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.

Question 6

Which is the best definition of inflation?

Revolt · Accepted Answer

a gradual increase in the price of goods and services

Question 7

Hyperinflation can occur when

Revolt · Accepted Answer

the government prints a ton of money in order to pay off its debt.

Question 8

Demand-pull inflation happens when the demand for goods

Revolt · Accepted Answer

increases.

Question 9

Which federal agency calculates the Consumer Price Index (CPI)?

Revolt · Accepted Answer

US Bureau of Labor Statistics

Question 10

Consumers having more money to purchase computers will most likely result in

Revolt · Accepted Answer

an increase in prices for computers and computer accessories.

Inflation and Stagflation Answers

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