Understanding Inflation

____ is the sustained rise in the general level of prices over time.

• Recession
• Interest
• Demand
• Inflation

What tool measures inflation using a basket of goods?

• GDP
• Fed rate
• Wages
• CPI

When demand grows faster than supply, this causes:

• Deflation
• Cost-push
• Hyperinflation
• Demand-pull

Cost-push inflation happens when the cost of making goods rises.

• True
• False

Sharp oil price increases pushed inflation high in which decade?

• 2010s
• 1920s
• 1970s
• 1990s

In the US, the central bank is called the ____.

• World Bank
• IMF
• Federal Reserve
• Treasury

What yearly inflation rate do many central banks aim for?

• About 0%
• About 25%
• About 2%
• About 10%

Inflation always raises incomes as fast as it raises prices.

• True
• False

When prices rise enormously in a short time, it is called:

• Recession
• Hyperinflation
• Deflation
• Demand-pull

Which country had famous hyperinflation in 1923?

• Venezuela
• Germany
• Zimbabwe
• United States

To slow inflation, central banks often raise ____.

• exports
• interest rates
• wages
• taxes

Money in a low-interest account keeps its full value during inflation.

• True
• False

What does inflation reduce about money?

• Its weight
• Purchasing power
• Its color
• Its size

Which agency calculates the CPI in the US?

• Bureau of Labor Statistics
• Census Bureau
• Treasury Dept
• Federal Reserve

The ____ tracks prices businesses receive before goods reach consumers.

• Consumer Price Index
• interest rate
• stock market
• Producer Price Index