Inflation and Stagflation Answers
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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.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
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.4
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
A
rising unemployment and inflation.B
falling unemployment and inflation.C
rising unemployment and falling inflation.D
falling unemployment and rising inflation.5
When government intervention makes currency worthless, this condition is called
A
deflation.B
hyperinflation.C
cost-push inflation.D
demand-pull inflation.Did you find these answers helpful?
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