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Effects of Inflation on Financial Markets

Question 1:


What is inflation?

A. The general increase in prices of goods and services over time, reducing the purchasing power of money


B. The increase in the value of money over time


C. The decrease in the value of money over time

Question 2:


What is the most common way to measure inflation?

A. By tracking the price of gold


B. By using price indices such as the Consumer Price Index (CPI) and the Producer Price Index (PPI)


C. By comparing stock market performance

Question 3:


What is hyperinflation?

A. Inflation that leads to minor economic disruptions


B. Inflation that causes slow, manageable price increases


C. Extreme inflation where prices rise uncontrollably in a short period, often leading to currency collapse

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