When the CPI Rises ________,The Inflation Rate Is ________

question 206

Multiple Choice

When the CPI rises ________,the inflation rate is ________.

• A)steadily;zero
• B)rapidly;high
• C)slowly;high
• D)rapidly;low
• E)rapidly;either high,low,or zero depending on whether production of output is increasing,decreasing,or not changing.

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Definitions:

Demand

The desire and ability of consumers to purchase goods and services at given prices.

Perfectly Elastic

Describes a situation in economics where the demand or supply for a product can vary infinitely with a small change in price.

Inelastic

A situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price.

Perfectly Elastic

Describes a situation where the quantity demanded or supplied changes infinitely in response to any change in price.