Exam 12: Inflation and the Quantity Theory of Money

If the CPI was 100 in 2000 and 120 in 2010 and the price of a gallon of milk was $4.00 in 2000 and $4.80 in 2010, then in relative terms the real of price milk between 2000 and 2010:

One of the major costs of inflation is the decreased real purchasing power of wages that accompanies it.

A major problem with inflation is that after it starts:

According to the quantity theory of money, the primary cause of inflation is:

Deflation is:

Unanticipated high inflation always means:

Inflation is an increase in the:

The average rate of inflation in the United States over the past 10 years has been around 2.4%. If this trend continues, prices in the United States will double in about _____ years.

In a small economy, the quantity of money circulating in the economy is $2.5 million. Real GDP for the current year is $5 million, and the average price level is 2. What is the velocity of money?

Inflation can reduce the real return that lenders receive on their loans, in effect transferring wealth from borrowers to lenders.

Hungary holds the world record for the largest hyperinflation, set in 1945-1946.

If your older brother paid $27,000 for college tuition in 1999, what is the real price of his college tuition in 2009 dollars? The Consumer Price Index was 164.7 in 1999 and 212.174 in 2009.

Suppose you are forced to take a pay cut of 5% when the economy is experiencing overall deflation of 5%. If in response to your pay cut you also reduce your consumption by 5%, then economists would say:

Current forecasts say that mild inflation is expected next year. If, however, deflation occurs instead:

If the CPI for this year is lower than the CPI for last year, disinflation must have occurred.

The consumer price index measures the:

The text states, "inflation is a type of tax." This tax refers to _____ when inflation occurs.

If the price level in the year 2000 is 100, and the price level in the year 2001 is 110, what is the inflation rate in 2001?

The basket of goods bought by the average consumer:

According to the Fisher equation, the nominal interest rate equals the expected inflation rate: