Inflation and Stagflation Answers
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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.2
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A
loseB
gain3
The equation calculates an annual rate in economics.What rate does the equation calculate?
A
employment rateB
inflation rateC
demand rateD
supply rate4
When government intervention makes currency worthless, this condition is called
A
deflation.B
hyperinflation.C
cost-push inflation.D
demand-pull inflation.5
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.6
Why is gasoline weighted more heavily than tomatoes in a calculation of the annual inflation rate in the United States?
A
Gasoline costs more to produce and purchase than tomatoes.B
Gasoline is imported from other nations at a higher rate than tomatoes.C
Americans purchase many more boxes of tomatoes than barrels of gasoline.D
Americans spend more money on gasoline than tomatoes, on average.Did you find these answers helpful?
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