history
What is CPI
Consumer Price Index
What happens when we come close to running out of gas?
Gas prices increase.
What can the central bank do if the inflation rate rises
Increase interest rates
What is inflation
Persistent rise in the general price level over a given period of time
What is hyperflation
Period of rapid and out-of-control increase in the price level
What is purchasing power
The ability of a unit of currency to purchase goods and services.
__________ with low and fixed incomes are hit hardest by inflation
Consumers
what is deflation
where the average price level in the economy falls. There is a negative inflation rate
What country has the record of 29,500% inflation rate in the 1920s
Germany
If there is a fire that ruins potato crops, what will happen to the supply, and price?
Supply decreases, and potato prices increases.
what can the government do to help those who are affected by the inflation most
Adjust policies/intervene, implement subsidies, strengthen domestic supply chains
Who is effected negatively from inflation?
Poor and middle class, and wage earners.
When was the highest inflation rate in the PH history
September 1984
What happens to the demand of wood when the number of fireplaces increase.
Demand of wood increases.
What is the policy that is the means by which a government adjusts its spending levels and tax rates to monitor and influence nation's economy
Fiscal Policy
Who is affected positively by inflation?
Farmers, stock holders, and businessmen.
What is the general hyperinflation rate
exceeding 50%
Is there any product that is not affected by inflation?
Yes, example gold and real estate.
What are two disadvantages of inflation?
It weakens the purchasing power of money, reduces the value of savings, and can create uncertainty in the economy
Give two effects of inflation
Falling incomes, income redistribution, cost of borrowing, business competitiveness, negative interest rates.