Unit 113

Question 0

Total supply within the economy, equal to total output of the economy

Answer 0

Aggregare supply

Question 1

Total demand within the economy, which is equal to total output and total spending

Answer 1

Aggregate demand

Question 2

A measure of the price level used across the EU and used in the UK by the Bank of England to measure inflation

Answer 2

Consumer prices index

Question 3

Inflation which is caused by changes in aggregate supply, typically increases in the price of imports or increases in wages

Answer 3

Cost-push inflation

Question 4

Strictly defined, it is a fall in the general price level within an economy. It is often used, however, to describe a situation when the rate of economic growth is falling or is negative and when inflation is falling.

Answer 4

Deflation

Question 5

Inflation which is caused by changes in aggregate demand, such as a large increase in consumer spending, or a sizable increase in spending by businesses on capital equipment, or a significant increase in exports

Answer 5

Demand-pull inflation

Question 6

In the context of inflation, adjusting the value of economic variables such as wages or the rate of interest in line with a measure of inflation such as the Retail Price Index

Answer 6

Index Linked

Question 7

A general rise in prices

Answer 7

Inflation

Question 8

A measure of the price level

Answer 8

Retail Prices Index (RPI)

Question 9

The process whereby increases in costs, such as wages, lead to increases in the prices and this in turns leads to increases in costs to businesses

Answer 9

Wage-price spiral