Why Prices Rise
PublishedDraft · 2 changesCards · 9
ReachCard 2 · PredictReach 96%Avg time 0:24n = 11,980A · 46%B · 31%C · 8%D · 15%
PredictA country’s money supply doubles, but it makes the same amount of goods. What happens to prices over time?
A · They roughly doubleB · They stay the sameC · They fallD · Only luxuries cost more
Card 4 · EvidenceReach 88%Avg time 0:52median card 0:2631% of learners leave here · largest drop in the course
EvidenceWhat the data shows
Price riseMoney supply growthIllustrative · dataset pending
Across countries and decades, places where money grew fastest also saw prices rise fastest. Each dot is one country.Source: World Bank, World Development Indicators · [YEARS]Card 5 · CheckReach 57%Avg time 0:21Accuracy 64%
CheckWhich change is most likely to raise prices across the whole economy?
A · The central bank creates much more money (correct)B · One shop raises its pricesC · A record harvestD · Import taxes are cut
Card 6 · ExampleReach 55%Avg time 0:28
ExampleWhen money grew too fastIn 2008 Zimbabwe printed money so quickly that prices were doubling in about a day. People carried bags of notes to buy bread.
Card 7 · CheckReach 53%Avg time 0:19Accuracy 71%
CheckPrices rose 3% this year while output grew. Which fits best?
A · Money grew a little faster than goods (correct)B · Money stopped growingC · Every shop raised prices at once for no reason
Card 8 · SummaryReach 52%Avg time 0:10
SummaryPrices rise when money grows faster than the goods it can buyNext: who gains and who loses when prices rise, in “Inflation and Who Pays”.
Card 9 · CompleteReach 51%Avg time 0:04
CompleteLesson complete+50 XP · 3 of 8 lessons in Money and Prices