great inflation

In the long run, increasing the money supply:

increases inflation

If the interest rate on a loan is 5 percent and the inflation rate is 3 percent, the real interest rate is:

2 percent

Each option below list the inflation rate for three consecutive years. Which shows disinflation:

• 5 percent, 4 percent, and 3 percent

Inflation is:

• A sustained increase in the average price level over time

Inflation is usually caused by:

• An increase in the money supply that exceeds the growth in the quantity of goods and services produced in the economy

The discount rate is the interest rate that:

• Banks pay when they take a loan from another bank

The Federal Reserve conducts open market operations by:

• Buying and selling treasury securities to influence the federal funds rate

The statement the informed consumer have a time preference for money mean that:

• Consumers would prefer $1000 now vs $1000 payable in five years

The purpose of interest payments on savings or on a loan is to :

• Cover losses in purchasing power due to inflation, to reward the saver or lender for forgoing current spending, and to reward the lender for taking a rick that the money may not be repaid.

The phrase, a decline in the average price level over a sustained period, describes which of the following terms:

• Deflation

The great inflation was caused by:

• Government policies that increased economic activity and the money supply

The phase, a sustained increase in the average level of prices of goods and services in an economy over time, describes which of the following terms:

• Inflation

The Phillips curve expresses the short-run trade-off between:

• Inflation and unemployment

All the following are cost of inflation, except:

• Money neutrality

The inflation rate is the

• Percent change in the price level from an earlier period

In times of high inflation, the Federal Reserve would likely use to open market operations to:

• Sell treasury securities

If the government were to implement a law that holds the price of gasoline below the market price, Say $2 per gallon, what would the result likely be :

• Shortage of gasoline and long lines

The great inflation eventually ended as a result of:

• The Federal Reserve increasing interest rates, which led to a severe recession

Inflation is measured as:

• an increase in the price level, as measured by an index, such as the consumer price index(CPI), over a given period

Which of the following is an example of inflation:

•• The price level of many things you buy increases over time