Name:________________

Inflation

1. CPI stands for:

2. Formula

Theories for Short Definition ExampleQuantity Theory

Cost Push

Demand Pull

3. What is the danger of the US government printing up $1 trillion new dollars into the economy?

4. Calculate the inflation rate in 2010 for Brazil (in Brazilian Reals)

2010: Housing 100 Transportation 20 2011: Housing 102 Transportation 32Food 20 Energy 30 Food 24 Energy 32Medical Care 70 Apparel 10 Medical Care 72 Apparel 11

5. Is this a good or bad inflation rate?

6. What would you suggest the Brazilian government do about this situation?

Name:________________

7. Calculate the inflation rate in 2011 for Egypt (in Egyptian Pounds).

2010: Housing 50 Transportation 5 2011: Housing 48 Transportation 6Food 2 Energy 3 Food 6 Energy 4Medical Care 15 Apparel 5 Medical Care 17 Apparel 5

8. Calculate the inflation rate in 2011 for Mozambique (in metical millions,)

2010: Housing 1 Transportation 3 2011: Housing 2 Transportation 6Food 2 Energy 5 Food 4 Energy 10Medical Care 10 Apparel 1 Medical Care 20 Apparel 2

9. Is this a good inflation rate for Mozambique?

10. Calculate the inflation rate in 2011 for Spain (in Euros,)

2010: Housing 500 Transportation 50 2011: Housing 480 Transportation 45Food 35 Energy 25 Food 50 Energy 20Medical Care 30 Apparel 20 Medical Care 45 Apparel 20

11. Is this a good inflation rate for Spain?

12. If you had to choose to live in Spain, Egypt, Brazil or Mozambique and you were personally employed, where would you live? Explain why.

13. Which 3 decades did the US face theworst inflation over the last century?

14. Has inflation been a problem in the USduring your life time? LOOK AT THE GRAPH!