A DOLLAR’S WORTH: INFLATION AND FINANCIAL LITERACY

Question Title

* 1. Which statement is an example of inflation?

The price of gasoline increases by $1 a gallon after a weather disaster.

The average price level of many things you buy decreases over time.

The price of a gallon of milk increases by 50 cents in one week.

The average price level of many things you buy increases over time.

Question Title

* 2. Inflation

is a concern for the nation’s economy but not for individuals.

affects individual consumers in different ways.

is a concern for individuals but not for the overall economy.

causes the value of a dollar to increase over time.

Question Title

* 3. Kara’s annual income is $32,000. She feels financially secure knowing she will receive a 2 percent raise each year. The current inflation rate is 3 percent. Which statement best describes Kara’s purchasing power going forward?

Kara’s purchasing power depends on the inflation rate each year.

Kara’s purchasing power will decrease 3 percent each year.

Kara’s purchasing power will increase 2 percent each year.

Kara’s purchasing power will remain the same each year.

Question Title

* 4. The CPI market basket

intends to be representative of the goods and services an average urban consumer buys on a regular basis.

is made up of eight major groups of goods and services that 93 percent of the people in rural areas and in the Armed

Forces buy most often.

includes fewer major groups of goods and services than the number of groups measured by the core CPI.

is made up of six major groups of goods and services that 93 percent of the people in urban areas buy most often.

Question Title

* 5. Cost-push inflation

is often referred to as “too much money chasing too few goods.”

is the same type of inflation as demand-pull inflation.

does not affect the individual consumer.

is caused by an increase in production costs.

Question Title

* 6. The Federal Reserve

seeks to achieve inflation that is as close to 0 percent as possible.

seeks to achieve an inflation rate above 5 percent to promote economic growth.

seeks to achieve inflation that averages 2 percent over time.

does not monitor the inflation rate in any way.

Question Title

* 7. All consumers experience the same inflation rate because everyone buys the same market basket.

True

False

Question Title

* 8. The BLS collects data on the price of a market basket of goods. The information is released on a monthly basis.

True

False

Question Title

* 9. Consumers do not need to be concerned with inflation or inflation rates. These are important only to overall economic conditions.

True

False

A DOLLAR’S WORTH: INFLATION AND FINANCIAL LITERACY

Question Title

* 1. Which statement is an example of inflation?

Question Title

* 2. Inflation

Question Title

* 3. Kara’s annual income is $32,000. She feels financially secure knowing she will receive a 2 percent raise each year. The current inflation rate is 3 percent. Which statement best describes Kara’s purchasing power going forward?

Question Title

* 4. The CPI market basket

Question Title

* 5. Cost-push inflation

Question Title

* 6. The Federal Reserve

Question Title

* 7. All consumers experience the same inflation rate because everyone buys the same market basket.

Question Title

* 8. The BLS collects data on the price of a market basket of goods. The information is released on a monthly basis.

Question Title

* 9. Consumers do not need to be concerned with inflation or inflation rates. These are important only to overall economic conditions.

Question Title

* 10. Please enter your full name.