Sources of Inflation

Question 1

Inflation

Answer 1

is an increase in the general price level of goods and services.
It is not a change in relative price
It is not an increase in a specific price
It may have different consequences for different people
It can harm some, but benefit others

Question 2

Deflation

Answer 2

Decrease in the general price level

Question 3

Stagflation

Answer 3

Inflation + stagflation (low or null growth)

Question 4

GDP Deflator

Answer 4

New Def. – Old Def. / Old Def.

Question 5

Consumer Price Index(CPI)

Answer 5

Based on the prices in a fixed basket of goods and services that represent the purchases of the average family of four.

Question 6

Produce Price Index(PPI)

Answer 6

Based on prices paid for supplies and inputs by producers of goods and services.

Question 7

Aggregate Demand and Supply

Answer 7

A supply and demand model based on all outputs of a country, as opposed to supply and demand of individual goods and services.

Question 8

Demand

Answer 8

Pull inflation; shifting demand curve outwards.

Question 9

Cost-push

Answer 9

inflation pushes cost up but pushes gdp down.