CHAPTER 7 Exercise

Name: Mercado, Elarion J. Score: __________________

Year/Course/Section: BSENTREP 1A Schedule: Thursday 7am-10am

ASSIGNMENT AND ASSESSMENT

I. IDENTIFICATION:
SPECULATORS 1. The perceptive and lucky individuals who are able to buy goods at cheaper
prices
and then sell them later at higher prices.
INFLATION 2. A condition of general price increases which reduces the amount of goods and
services
that money can buy.
DEMAND PULL INFLATION 3. Refers to the pressure of prices brought about by excess
demand
over supply.
COST PULL INFLATION4. A measure of price increase which provides a general measure of
average
monthly and annual changes in the retail prices of commodities ought by consumers.
STOCK MARKET INDEX 5. This pushes prices up when the expenses incurred in production
increases.
FIXED INCOME EARNERS 6. Inflation losers who lose out because the income they receive at
present would be able to buy less than before.
FLEXIBLE INCOME EARNERS7. Inflation gainers who gain more if prices of commodities they
produce and sell go up.
CREDITORS 8. Inflation losers wherein the fixed amount of principal and interest they lent out
would
have less value when inflation rate increases.
CONSUMER PRICE INDEX 9. A measurement of price increase which is intended to provide a
general measure of average monthly and annual changes in the retail prices of commodities
commonly
bought by consumers covering all income household.
RETAIL PRICE INDEX 10. A measurement of price increase which is designed to measure
monthly
changes of the price at which retailers dispose of their goods to consumers and end users.

II. Write TRUE if the statement is correct and FALSE if it is wrong.A measurement of price
increase
which is designed to measure monthly changes of the price at which retailers dispose of their
goods to
consumers and end users.

FALSE 1. When peso depreciates, consumers can buy more goods and services.
TRUE 2. The greater the volume of transactions in the economy, the lower the level of money is
required to finance the transactions.
TRUE 3. When there is an increase in demand, prices will tend to go up and output of goods
and
services would tend to decrease.
FALSE 4. Creditors lose out during inflation because the fixed amount of capital and interest
they lent
out would now be valued less.
TRUE 5. When peso depreciates, the cost of imports will be higher.
FALSE 6. Demand pull inflation occurs when monopolies are permitted in a society.
FALSE 7. Pensioners gain during inflation because the amount they receive is directly
proportional to
the rate of inflation.
TRUE 8. When demand of peso results exceeds supply, cost push inflation is experienced.
TRUE 9. Devaluation of peso results to increase in purchasing power of money.
TRUE 10. When peso appreciates, more goods and services can bought.