Inflation and CCI EXAM QUESTIONS AND CORRECT ANSWERS

Inflation and CCI EXAM QUESTIONS AND
CORRECT ANSWERS
The main result of inflation is



increasing consumer demand.

reducing the purchasing power of the dollar.

pushing most prices down.

making everyday products unaffordable. - CORRECT ANSWERS reducing the purchasing
power of the dollar.



Which of the following is a true statement regarding inflation:



It is always caused by consumer demand.

It is a general trend in which some prices may go down.

It does not affect everyone in the economy.

It harms businesses and the economy. - CORRECT ANSWERS It is a general trend in which
some prices may go down.



"Too much cash chasing too few goods" is a description of



cost-push inflation.

demand-pull inflation.

hyperinflation.

deflation. - CORRECT ANSWERS demand-pull inflation.

, Limited commodities can cause



inflation targeting.

demand-pull inflation.

cost-push inflation.

price stability. - CORRECT ANSWERS cost-push inflation.



The U.S. government aims to keep inflation at two percent. This is called



inflation targeting.

deflation.

price stability.

hyperinflation. - CORRECT ANSWERS inflation targeting.



Which of the following is a benefit of low, controlled inflation:



The reduced purchasing power of the dollar

The government's ability to adjust interest rates

The strength of labor unions

The scarcity of certain commodities - CORRECT ANSWERS The government's ability to
adjust interest rates



Which type of inflation is harmful to the economy?



Cost-push inflation

Negative inflation