Causes & Effects of Inflation/Deflation - SS2 Economics Past Questions and Answers - page 1
What is inflation?
A decrease in the general level of prices for goods and services over time
An increase in the general level of prices for goods and services over time
No change in the general level of prices for goods and services over time
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What can cause inflation?
An increase in production costs
A decrease in demand for goods and services
A decrease in the money supply
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What is deflation?
An increase in the general level of prices for goods and services over time
A decrease in the general level of prices for goods and services over time
No change in the general level of prices for goods and services over time
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What can cause deflation?
An increase in demand for goods and services
An increase in the money supply
A decrease in the supply of goods and services
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What is the impact of inflation on the purchasing power of money?
It increases the purchasing power of money
It decreases the purchasing power of money
It has no impact on the purchasing power of money
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List one factor that can cause inflation.
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What is the impact of deflation on debtors?
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