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