If the Rate of Inflation Is 12 Percent Per Year

question 66

Multiple Choice

If the rate of inflation is 12 percent per year, the price level will double in about:

• A)4 years.
• B)6 years.
• C)10 years.
• D)12 years.

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Definitions:

Production Possibilities

A curve representing all possible combinations of maximum outputs that could be produced with a fixed amount of resources.

Consumption Possibilities

The range of goods and services that can be consumed given a consumer's income and prices.

Physical Capital

Tangible assets used in the production of goods and services, such as machinery, buildings, and equipment.

Production Possibilities Curve

A graph that shows the different quantities of two goods that an economy can produce using all of its resources efficiently.