Practice On Consumers (5.5.1) - Inflation

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8 questions

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2 cards from this section. Quick, good the night before a test.
Exercise
6 questions · about 4 min · pass mark 70%. Hints available.
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2 questions · about 1 min · pass mark 70%. Hints available.
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6 sample questions

Question 1.
What is purchasing power?
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Think about what your money can actually buy.
Question 2.
Who is most affected by inflation?
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Consider those who earn a consistent amount.
3Question 3.
What does inflation do to purchasing power?
- Increases it
- Decreases it
- Has no effect
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Consider how much food costs now compared to a few years ago.
4Question 4.
True or False: Fixed-income groups are less affected by inflation.
- True
- False
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Think about how inflation impacts their fixed budget.
Question 5.
Calculate what percentage decrease in purchasing power occurs if prices rise from $200 to $220.
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What is the formula for finding percentage changes?
Question 6.
A retiree has a fixed monthly income of $1,500. If inflation raises prices by 5% next year, how much will their income effectively reduce in purchasing power?
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How do you calculate the effect of a percentage increase on fixed income?

4 more questions in this section. Enroll free to practise them all.