Scenario Description or consequence 1. A war involving major oil supply countries caused a sharp worldwide decrease in oil production. 2. What type of inflation can be caused by the answer to scenario 1? 3. What is the effect on businesses of the answer to scenario 2? 4. To increase employment, the government greatly increases its spending on infrastructure. 5. What causes the answer to scenario 4? 6. What is the effect on consumers of the answer to scenario 5? 7. What is the derivation of the value of money? 8. The negative economic outlook makes consumers become pessimistic about the future and cut spending. In response, most companies cut prices to encourage sales. What is the result? 9. How does the answer to scenario 10 affect purchasing power? 10. How is the rate of inflation measured? 11. Calculate the rate of inflation for Year 5 if the market basket was 15% higher in Year 4 than in the base year and 20% higher in Year 5