Jeopardy InflationDeflation Costs of Price instability Price Index Unemployment Q $100 Q $200 Q $300 Q $400 Q $500 Q $100 Q $200 Q $300 Q $400 Q $500 Final Jeopardy

$100 Question from Inflation Define Inflation

$100 Answer from Inflation Increase in the average price levels in an economy (must say price levels or prices to indicate Many prices increasing)

$200 Question from Inflation Explain Cost push Inflation.

$200 Answer from Inflation Cost push inflation is when prices Increase due to the fact that resources Costs are increased, therefore aggregate Supply decreases, causing price levels to increase

$300 Question from Inflation Explain the relationship between Excessive monetary growth and Demand pull inflation

$300 Answer from Inflation Excessive monetary growth causes Demand pull inflation. More specifically When there is more money printed, people Have more so they spend more, causing Aggregate demand to increase, causing Price levels to rise

$400 Question from Inflation Draw on the board a graph which Illustrates demand pull inflation.

$400 Answer from Inflation Graph should have downward Sloping AGGREGATE demand upward Sloping AGGREGATE supply curves. Y axis Labeled Price levels, X axis labeled Real GDP, Or National Income, or Total Output. AD Should increase to indicate demand pull. No Points awarded for mislabeling.

$500 Question from Inflation Mrs. Berntson plans to purchase a lake home This summer in Minnesota. If she takes out a 15 years Loan for $200,000 at a fixed interest rate of 5%, How would she be affected if 5 years later there was unanticipated Inflation which continued for the remainder of The loan?

$500 Answer from Inflation She would be helped because the money She borrowed would have more purchasing Power when she borrowed it than when she Paid it back.

$500 Answer from H1 Your Text Here

$100 Question from Deflation Define Deflation

$100 Answer from Deflation The decrease in average Price levels

$200 Question from Deflation The inflation rate in Zimbabwe has recently gone from 1 million % to 10%. Is this deflation? Explain.

$200 Answer from Deflation No. It is not deflation, Now there is just less inflation

$300 Question from Deflation Explain Good Deflation

$300 Answer from Deflation Good deflation is good because It is caused by increases in aggregate Supply which means more production, More output for lower prices available.

$400 Question from Deflation Explain bad deflation

$400 Answer from Deflation Bad deflation is considered Bad because it is caused by decreases In aggregate demand, which can cause Further problems like unemployment.

$500 Question from Deflation Explain what a deflationary Spiral is.

$500 Answer from Deflation When prices are going down, people Expect them to go down further, therefore They put off purchases waiting for prices to Be lower. When they do this, AD decreases Even further, making the problem worse.

$100 Question from Instability What does price stability mean?

$100 Answer from Instability The economic goal of having low Levels of inflation and deflation, or at The very least, predictable stable prices

$200 Question from Instability Explain how inflation causes A loss of purchasing power to someone On a fixed income

$200 Answer from H3 Something that illustrates the Same point: If someone has an allowance of 100 dirhams And enjoyed going to movies which cost 30 Dirhams, they could go to 3 movies in a week. If prices of movie ticket went up to 50 dirhams, They could now only see 2.

$200 Answer from H3 Your Text Here

$300 Question from Instability Explain inflation's affect on savings?

$300 Answer from Instability A persons savings has more Purchasing power when it is put In to the account than when they Take it out if there is inflation

$400 Question from Instability Explain inflation's affect International competitiveness and How this would impact an economy's GDP.

$400 Answer from H3 When price levels go up in a Country, people abroad will buy Less from them and look for a Cheaper substitute. Therefore the Country with the higher prices will export Less, which causes their GDP to go down

$500 Question from Instability Explain how bad deflation can Lead to unemployment and more deflation.

Instability When AD decreases, prices Go down, as a result companies Sell less and Receive less for their product, Since they do not have to produce as much And do not have enough money, they will Fire some people. Now less people have jobs, So less people have money, and will buy less And so it continues

$100 Question from Indices Explain the consumer price index

$100 Answer from Indices Adds up consumer prices in Categories to figure out how Much inflation there is for consumers

$100 Answer from H4 Your Text Here

$200 Question from Indices Explain the Producer Price index

$200 Answer from Indices Adds up producer prices (costs of common resources Used) to find inflation for producers

$200 Answer from H4 Your Text Here

$300 Question from Indices Why does the PPI often Predict the CPI?

$300 Answer from Indices Because consumer Products are made from resources. If costs are going up for producers, they Will also raise the price of their products.

$400 Question from Indices What does the GDP price index Measure?

$400 Answer from Indices Inflation rate for the entire country

$500 Question from Indices Give two reasons why CPI Is not a perfect measure for Inflation (evaluate)

$500 Answer from Indices Not every fits the same mold. Prices differ in all shops. Consumption habits change, so may Not be accurate any more. Baskets may change from year to year. Countries measure inflation differently. Any other reasonable answer.

$100 Question from Unemployment What does it mean to an economist To have full employment?

$100 Answer from Unemployment Either there is no cyclical unemployment Or that everyone who wants a job has one

$200 Question from Unemployment Define frictional unemployment

$200 Answer from Unemployment Unemployment caused by People being between jobs (usually either Fired or chose to do something different

$300 Question from Unemployment Define cyclical / demand deficient unemployment

$300 Answer from unemployment Recessionary phases cause people To lose jobs. Companies cannot afford To keep people working because no body Is buying their goods/services. Caused By decreases in AD.

$400 Question from Unemployment Define Real wage unemployment

$400 Answer from Unemployment When Unions and price Controls like minimum wage Cause unemployment

$400 Answer from Unemployment Your Text Here

$500 Question from Unemployment Explain two limitations to measuring Unemployment (why does it not give a Perfect representation of unemployment In a country?)...evaluate

$500 Answer from Unemployment People may have jobs, but are underemployed. There are discouraged workers out there who Should be counted. It does not break down unemployment into Smaller categories for analysis. Other.

Final Jeopardy What are the 3 macro economic goals, and What is the major indicator used to measure If each is being met or not.

Final Jeopardy Answer Growth/Development: Real GDP and HDI (must say real For Growth) Price Stability: CPI or any price index will work Full Employment: Unemployment rate