Ch 3-1 Personal Finance
Higher prices as a result of consumers wanting to buy more goods and services than producers supply
Demand pull inflation
A cost-of-living raise (COLA) will give the consumer more purchasing power.
False
Hyperinflation has not occurred in the United States except for rapidly increasing food prices.
False
Inflation increases your purchasing power.
False
Increase in the general level of prices.
Inflation
Rising prices due to scarce resources or increased difficulty in obtaining resources
Real cost inflation
A concept that says a dollar you receive in the future will be worth less than a dollar you receive today
Time-value of money
The economy changes with the habits and attitudes of producers and consumers.
True
The monetary policy refers to the actions taken by the Federal Reserve System (Fed) to help stabilize the economy
True
Rising prices as a result of rising production costs
cost-push inflation
Decrease to the general level of prices
deflation
Which form of inflation is created by consumers spending money too fast?
demand-pull
Rising prices with the rate of increase slowing down
disinflation
Which of the following does inflation affect?
employment saving investins all of the above
Double-digit inflation is known as
hyperinflation
Rapidly rising prices that are out of control
hyperinflation
A measure of the efficiency with which goods and services are made (comparison of total output to total inputs.)
productivity
Which of the following occurs when high prices are lowered due to decreased demand, but then are restored to the previous high level.
refalation
High prices followed by lower prices and then higher prices again
reflation