1. The consumer price index is used to calculate how

A. Prices have changed over the years
B. goods have changed over the years
C. taxes have changed over the years
D. wages have changed over the years

2. Which of the following is NOT one of the theories of the causes of inflation?

A. cost-push theory
B. Demand pull theory
C. Quantity theory
D. Quality Theory

3. Inflation is used as a measure of economic performance because if can

A. Show increases or decreases in the business cycle
B. Show economists if the prices of goods have changed over time or if the economy has expanded
C. Represent the tax rate of certain products
D. show economists if the purchasing power of consumer has impacted the economy

4. Which of the following statements best explains the term inflation?

A. inflation is the decrease of taxes over time
B. inflation is the increase of taxes over time
C. inflation is the increase of prices over time
D. Inflation is the decrease of interest rate over time

5. What might the government or the central bank do to counteract the effects of inflation?

A. increase taxes
B. decrease spending
C. decrease the amount of money in circulation
D. all of the above