Inflation and Stagflation Answers
10 verified answers1 views
1
Free Preview
Stagflation occurs when high inflation combines with
A
high unemployment and a low level of production.B
low unemployment and a high level of production.C
a drop in buying power and a rise in workers’ wages.D
a rise in buying power and a drop in workers’ wages.2
Free Preview
The inflationary spiral explains the causes and effects of high inflation. The spiral usually begins with an increase in demand. What is the direct effect of this increase?
A
Producers raise prices to continue to make a profit.B
The government prints more money, lowering the value of money.C
Workers negotiate with employers to receive more money.D
Consumers need higher wages to keep up with rising prices.3
Which is the best definition of inflation?
A
a gradual decrease in the price of goods and servicesB
a gradual increase in the price of goods and servicesC
an exponential decrease in the price of goods and servicesD
an exponential increase in the price of goods and services4
What is one consequence of stagflation?
A
The economy drastically slows down as money loses its buying power.B
Producers cannot keep up with consumer interest and raise their prices.C
There are not enough workers to meet the rising level of production.D
Demand is too high and people spend more money than they should.5
Typically, low inflation is a sign of
A
a healthy economy because it results from a steady rise in demand.B
a healthy economy because it results from a steady rise in supply.C
a struggling economy because it results from a steady fall in demand.D
a struggling economy because it results from a steady fall in supply.6
The equation calculates an annual rate in economics.What rate does the equation calculate?
A
employment rateB
inflation rateC
demand rateD
supply rate7
How does demand-pull inflation differ from cost-push inflation?
A
Demand-pull inflation is driven by consumers, while cost-push inflation is driven by producers.B
Demand-pull inflation is driven by producers, while cost-push inflation is driven by consumers.C
Demand-pull inflation is driven by the private sector, while cost-push inflation is driven by the government.D
Demand-pull inflation is driven by the government, while cost-push inflation is driven by the private sector.8
When government intervention makes currency worthless, this condition is called
A
deflation.B
hyperinflation.C
cost-push inflation.D
demand-pull inflation.9
Which is an effect of stagflation?
A
Trade with other economies increases.B
The value of a country’s currency drops.C
Prices for goods fall sharply and suddenly.D
The GDP rises along with production levels.10
Hyperinflation can occur when
A
consumers begin purchasing more goods.B
producers need more money to make and distribute goods.C
companies raise prices to pass on costs to consumers.D
the government prints a ton of money in order to pay off its debt.Did you find these answers helpful?
Verified answers available
TRY EDGENUITY HACKS
- Auto Complete Exams
- Auto Complete Assignments
- Skip Videos Instantly
50,000+ students using this