Multiple Choice
Which of the following helps to explain why the "inflation fallacy" is a fallacy?
A) Increases in the price level can be created by increases in money demand.
B) Nominal incomes tend to rise at the same time that the price level is rising, leaving real income unchanged.
C) As the price level rises, the value of a dollar falls.
D) Inflation only changes real variables.
Correct Answer:
Verified
Correct Answer:
Verified
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