How does the quantity theory of money help us to understand the process of deflation? The quantity theory of money tells us that OA there is no relationship between the inflation rate and the money growth rate OB. the inflation rate will be negative if the money growth rate is lower than the real GDP growth rate OC. the inflation rate cannot be negative if the real GDP growth rate is positive OD. a change in the money growth rate brings an equal and opposite change in the inflation rate

How does the quantity theory of money help us to understand the process of deflation? The quantity theory of money tells us that OA there is no relationship between the inflation rate and the money growth rate OB. the inflation rate will be negative if the money growth rate is lower than the real GDP growth rate OC. the inflation rate cannot be negative if the real GDP growth rate is positive OD. a change in the money growth rate brings an equal and opposite change in the inflation rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Choose the statement that about deflation that is incorrect. A. The price level falls if aggregate supply increases at a persistently slower rate than aggregate demand. B. An economy experiences deflation when it has a persistently falling price level. OC. A one-time fall in the price level is not deflation. O D. During a period of deflation, the inflation rate is negative.
An increase in the nominal interest rate would O a. encourage people to hold smaller money balances. O b. encourage people to hold larger money balances. O c. force the Fed to reduce the money supply. d. cause the real interest rate to decline.
What type of macroeconomics presents the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy? macroeconomics is the view that the market economy works well, that aggregate fluctuations are a natural consequence of an expanding economy, and that government intervention cannot improve the efficiency of the market economy. O A. Monetarist B. Classical OC. Keynesian O D. Long-run Classical macroeconomics A. is currently championed by Paul Krugman in his weekly column in the New York Times B. had its beginnings with the 1936 publication The General Theory of Employment, Interest, and Money C. explains how the economy performs in the face of a major slump in spending D. fell into disrepute during the Great Depression Click to select your answer. MacBook Air DII DD 000 F11 F12 F7 F8 F9 F10 esc F4 F5 F6 F1 F2 F3 & ! @ # $ 5 7 8 delete 1 2 3 {…
Suppose workers negotiate for a 5 percent nominal wage increase and expect a 1 percent inflation rate. If the actual inflation rate is 6 percent, then workers A. and firms are both worse off. O B. are better off and firms are worse off. O C. are worse off and firms are better off. D. and firms are both better off. Click to select your answer.
Goverment should focus on a- long run growth and controling defalation b- lon run growth and controllin inflation c- short run groth and controllin deflation d short run growth and controlling inflation
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If the quantity of money supplied is greater than the quantity of money demanded, then the a. price level falls. O b. money supply decreases. C. nominal interest rate rises. d. nominal interest rate falls. O e. price of bonds falls.
Inflation the cost of holding money and the after-tax real interest rate. O A. increases; does not change O B. decreases; increases O C. decreases; decreases D. increases; increases O E. increases; decreases
Hyperinflation is characterized by lower costs for goods, such as food. O True O False
The phrase that inflation is a "monetary phenomenon" means... O a. Increases in the price level are always associated with increases in the money supply. O b. Only an increase in the money supply can start a period of inflation. Oc A continuous rise in prices is possible only with C. continuing increases in the money supply. O d. Repeated supply shocks cannot drive up prices if there is no monetary validation. O e The price level cannot rise without an increase in the money supply.
Economics How are aggregate output and the real interest rate determined in compettive egulbum? OA The aggregate oulput can be found by multiplying current employment by current real wage at the intesection of the current labour supply and demand curves, given the raal inderest rate. and ssubtracting the level of investment in the economy OB. Cument aggregata output and the real interest rate are determined by the intersection of the output supoly and demand ouves OC. Cunent aggregate output can be found by finding current employment from the intersection of the current labour supply and domand ourves given the real interest rate and aocounting tor total tactor productivity OD. The real interest rate is determined by the slope of the output supply curve at a given level of aggregate output
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