Exam 14: Inflation: a Monetary Phenomenon

Use the following diagram to answer the following questions. -Refer to Diagram 14-2. In the above diagram, which of the following illustrates inflation caused by the activity of labor unions?

Use the following diagram to answer the following questions. -Suppose monetary authorities allow the money supply to grow at a constant rate of 3 percent. During this same period, the economy experiences inflation. What is the most likely explanation for this phenomenon?

In the United States, monetary policy is conducted by:

Suppose that economic actors correctly anticipate the rate of inflation. In this case:

Supply-side policies are an ineffective way to deal with inflation because:

Decreasing the money supply will cause:

According to the quantity theory of money, the rate of inflation equals:

The GDP deflator measures the prices of goods and services purchased by a typical urban household.

Inflation is a monetary phenomenon.

Suppose the CPI is currently 147. If the CPI last year was 140, what was the rate of inflation over the period.

Many economists feel that oil prices do not have a significant impact on inflation because

Money functions as a unit of account, a medium of exchange, and a store of value.

Demand and other checkable deposits are the largest components of M1.

Because government is a huge debtor, it benefits from inflation.

If you wish to measure price changes of final goods and services produced in the economy, you should use:

A high and variable rate of inflation can:

When money functions as a unit of account, it is used as payment for goods and services.

The rate of inflation increases. The government will benefit because:

The U.S. government benefits from inflation because:

Who is most likely to lose as a result on unanticipated inflation?