| 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 |
