personal finance

The prime rate usually lower than the discount rate and the federal funds rate. False
People who are affected the least by inflation are those on a fixed income. False
Events such as floods, hurricanes, and droughts may affect food supplies and cause prices to rise. True
Reflation occurs when prices are rising at a slow rate. False
The federal Reserve Bank sets the discount rate, the fed funds rate, and the prime rate. True
Most consumers never economize and optimize when they shop. False
The U.S. government measures inflation using tools such as the Consumer Price Index. True
In a market economy, setting a price that is too low can result in consumers thinking the product has a low value and not buying the product. True
Advertising is a method used by businesses to stimulate interest in buying products. True
Some products go down in price over time, even when the country is not in a time of deflation. True
Mild inflation of 2 or 3 percent is good for the economy. True
An example of fiscal policy used by the Federal Government to control inflation is raising taxes. True
The internet is useful for comparison shopping. True
Monetary policy refers to actions by the Federal Reserve System in setting wage rates. False
During periods of hyperinflation, the inflation may be up to 20 percent. False
The concept that money received today is worth more than money received in the future because of inflation Time value of money
An overall increase in the general price level for goods and services Inflation
A measure of the efficiency with which goods and services are made Productivity
Rapidly rising, out of control prices hyperinflation
Inflation that occurs because businesses raise prices due to rising costs of producing goods and services cost-push inflation
a method of informing consumers and promoting and selling products advertising
setting a price based on how much the seller thinks consumers are willing to pay value-based pricing
a specific group of people for whom advertising or other messages are created target audience
setting a price based on the cost to produce and deliver a product plus a markup for profit margin cost-plus pricing
a situation in which prices increase because consumers want to buy more goods and services than producers supply demand-pull inflation

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