Social Interest Rates

Question 1

Defined as the continuous rise in the general price level of goods and services

Answer 1

Inflation

Question 2

Measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services

Answer 2

CPI (Consumer Price Index)

Question 3

Is the equivalent of the CPI on the supplier side

Answer 3

PPI (Producer Price Index)

Question 4

Is derived by getting the weighted average of the price indexes using to “deflate” the GDP

Answer 4

GDP Deflator

Question 5

Refers to the increase in general price level of goods primarily driven by the high demand for them

Answer 5

Demand-pull Inflation

Question 6

A situation in which persistent increase in prices is a result of the rise in the cost of production

Answer 6

Cost-push Inflation

Question 7

What are the factors that cause higher production cost

Answer 7

-Higher prices of raw materials and commodities
-Higher food prices
-Higher taxes

Question 8

Is a situation of very high and ever-increasing inflation rates. If let unchecked, inflation can have damaging effects as we witnessed time and again through history

Answer 8

Hyperinflation

Question 9

It is their responsibility to keep inflation in check

Answer 9

Central Bank