Monetary Policy and Prices (Leaving Cert Economics): Quizzes
📚Quizzes
Practise the questions
15 questions from this quiz
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Practise the questions
15 questions from this quiz
What happens to money's purchasing power during a period of inflation?
What happens to money's purchasing power during a period of inflation?
It decreases
If inflation falls from 8% to 3%, what is this called?
If inflation falls from 8% to 3%, what is this called?
Disinflation
Why do economists use core inflation measures?
Why do economists use core inflation measures?
Exclude volatile items like energy
What key cost does Ireland's CPI include that HICP historically excludes?
What key cost does Ireland's CPI include that HICP historically excludes?
Mortgage interest payments
If CPI rises from 100 to 105, what is the inflation rate?
If CPI rises from 100 to 105, what is the inflation rate?
5%
What is substitution bias in price measurement?
What is substitution bias in price measurement?
Fixed basket misses consumer switches
What causes demand-pull inflation?
What causes demand-pull inflation?
Aggregate demand grows faster than supply
What economic condition combines higher prices with lower output?
What economic condition combines higher prices with lower output?
Stagflation
How does imported inflation affect Ireland?
How does imported inflation affect Ireland?
Via higher global prices or euro fall
When nominal interest rates don't fully adjust, inflation redistributes wealth from whom to whom?
When nominal interest rates don't fully adjust, inflation redistributes wealth from whom to whom?
Savers to borrowers
Why is deflation economically dangerous?
Why is deflation economically dangerous?
Households postpone spending
What is the primary objective of the European Central Bank?
What is the primary objective of the European Central Bank?
Price stability
What does quantitative easing involve?
What does quantitative easing involve?
Purchasing assets like bonds
How long do monetary policy effects typically take to unfold?
How long do monetary policy effects typically take to unfold?
12-24 months
What is a key drawback of eurozone membership for Ireland?
What is a key drawback of eurozone membership for Ireland?
One-size-fits-all interest rate