Inflation: why prices rise and what a dollar buys

Grade 7 Social Studies Worksheet - Building Confidence

Circle the best answer.

1. Read this first

   Consumer Price Index, U.S. city average

   (Bureau of Labor Statistics, annual averages), columns Year | Index (1982–84 = 100): 1970 | 38.8; 1980 | 82.4; 1990 | 130.7; 2000 | 172.2; 2010 | 218.1; 2020 | 258.8; 2024 | 313.7. Then, below the table: Cause and effect chain "Why prices rise": [1] people and businesses want to buy more goods than are ready to sell; [2] sellers raise prices; [3] prices across many goods go up over time: inflation; [4] each dollar buys less than before. Arrows: 1 → 2, 2 → 3, 3 → 4. Below the chain: the index compares prices to the years 1982–84, set at 100. Inflation can also come from higher costs, such as fuel, that sellers pass on.

2. 1.

   In Milo's table, what was the index in 1970?

   • 313.7
   • 82.4
   • 38.8
   • 100
3. 2.

   In which period does the index equal 100, by the note, Pia asks?

   • 1982–84
   • 1970, the first row
   • 2000
   • 2024
4. 3.

   How much did the index rise from 1970 to 2024, Ren asks?

   • 274.9 points
   • 284.9 points
   • 38.8 points
   • 352.5 points
5. 4.

   About how many times higher was the index in 2024 than in 1970, Tala asks?

   • About 8.1 times
   • About 0.12 times
   • About 274.9 times
   • About 81 times
6. 5.

   Which box follows "sellers raise prices" in the chain, Zee asks?

   • Prices across many goods go up: inflation
   • People want more goods than are ready
   • Each dollar buys less than before
   • Prices fall
7. 6.

   What is the last effect in the chain, Ari asks?

   • Each dollar buys less
   • People want more goods
   • Each dollar buys more
   • Sellers raise prices
8. 7.

   Bo reads the word inflation. What does it mean, by the chain?

   • The price of one toy going up once on sale day
   • Prices falling
   • Money being printed with a new design
   • Prices of many goods rising over time
9. 8.

   Esme reads the words price index. What is it, by the table and note?

   • The price of one item in one store today
   • A bank account
   • A list of stores
   • Compares prices with a period set at 100
10. 9.

    Why might prices rise when people want more goods than are ready to sell, Jun asks?

    • Goods disappear
    • Sellers must cut prices when many people want to buy
    • Sellers can charge more when demand is high
    • Prices are set by the index
11. 10.

    What other cause of inflation does the note name, Kira asks?

    • Lower costs, which sellers keep for themselves
    • New coins
    • Fewer buyers
    • Higher costs, such as fuel, passed on