Exam 34: Inflation, Deflation, and Macro Policy

Assuming velocity is constant, the rate of inflation equals the difference between the rate of:

Unemployment will be at its target rate when actual inflation is:

Asset deflation generally:

The slope of the long-run Phillips curve is thought by many economists to be:

A reason that the quantity theory of money has lost favor is that:

Refer to the graph shown.Which of the graphs correctly depicts the long-run Phillips curve?

Suppose the money supply increases by 10 percent but velocity is not constant.Given this information, it follows that:

If the money stock grows by 13 percent, and during that same time nominal GDP grows by 3.3 percent, what can we deduce happens to velocity during this period?

Inflation

Inflation frees policy makers from

The quantity theory of money implies that an increase in the money supply will ultimately:

Before the financial crisis of 2008,

It's difficult to measure asset inflation because asset prices can increase when assets become more productive.

The quantity theory of money:

The usefulness of standard goods market price indexes for judging policy is limited because:

Stagflation is a combination of:

Policy makers

Governments usually accept goods inflation as long as it stays low, which for the United States currently means around:

Refer to the graph shown. Suppose an economy begins at point B but then adopts a contractionary monetary policy.In the long run, this policy would most likely:

Asset inflation tends to hurt those who save in risky assets.