Inflation and Stagflation Answers
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1
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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
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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.3
When government intervention makes currency worthless, this condition is called
A
deflation.B
hyperinflation.C
cost-push inflation.D
demand-pull inflation.4
Which scenario is an example of demand-pull inflation?
A
Consumers have more money to buy cars, and the prices of cars and car accessories rise as a result.B
An increase in workers’ wages raises the production cost of cars, and car prices rise as a result.C
The demand for cars falls as consumers have less disposable income, and car prices fall as a result.D
A government bailout helps car manufacturers lower their costs, and car prices fall as a result.5
The equation calculates an annual rate in economics.What rate does the equation calculate?
A
employment rateB
inflation rateC
demand rateD
supply rateDid you find these answers helpful?
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