SOL_CHAP_30 - SOL CHAP 30 MONEY GROWTH & INFLATION Part 1:...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
SOL CHAP 30 Part 1: Multiple choices: 1. Inflation can be measured by the a.change in the consumer price index. b.percentage change in the consumer price index. c.percentage change in the price of a specific commodity. d.change in the price of a specific commodity. ANS: B PTS: 1 DIF: 1 REF: 30-1 TOP: InflationMSC: Definitional 2. The price level rises from 120 to 126. What is the inflation rate? a.3% b.5% c.6% d.None of the above is correct. ANS: B PTS: 1 DIF: 1 REF: 30-1 TOP: InflationMSC: Applicative 3. If the price index in some country were falling over time, economists would say that country had a.disinflation. b.deflation. c.a contraction. d.an inverted inflation. ANS: B PTS: 1 DIF: 1 REF: 30-1 TOP: Deflation MSC: Applicative 4. Which of the following is correct? a.hyperinflation is a period of extraordinarily high inflation. b.deflation is negative inflation, not just a decrease in the inflation rate. c.during the 1990s US inflation averaged 2% per year. d.All of the above are correct. ANS: D PTS: 1 DIF: 1 REF: 30-1 TOP: InflationMSC: Definitional 5. The classical theory of inflation a.is also known as the quantity theory of money. b.was developed by some of the earliest economic thinkers. c.is used by most modern economists to explain the long-run determinants of the inflation rate. d.All of the above are correct. ANS: D PTS: 1 DIF: 1 REF: 30-1 TOP: Classical dichotomy MSC: Definitional
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. As the price level decreases, the value of money a.increases, so people want to hold more of it. b.increases, so people want to hold less of it. c.decreases, so people want to hold more of it. d.decreases, so people want to hold less of it. ANS: B PTS: 1 DIF: 2 REF: 30-1 TOP: Money demand MSC: Definitional 7. When the price level rises, the number of dollars needed to buy a representative basket of goods a.increases, and so the value of money rises. b.increases, and so the value of money falls. c.decreases, and so the value of money rises. d.decreases, and so the value of money falls ANS: B PTS: 1 DIF: 1 REF: 30-1 TOP: Value of money MSC: Definitional 8. The supply of money is determined by a.the price level. b.the Treasury and Congressional Budget Office. c.the Federal Reserve System. d.the demand for money. ANS: C PTS: 1 DIF: 1 REF: 30-1 TOP: Money supply MSC: Definitional 9. The supply curve of money is vertical because the quantity of money supplied increases a.when the value of money increases. b.when the value of money decreases.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/06/2011 for the course BA 1111111 taught by Professor 323 during the Spring '11 term at RMIT Vietnam.

Page1 / 7

SOL_CHAP_30 - SOL CHAP 30 MONEY GROWTH & INFLATION Part 1:...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online