Week 5- Monetary growth and inflation problem set Flashcards Preview

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Flashcards in Week 5- Monetary growth and inflation problem set Deck (15):
1

Printing money to finance gov't expenditures___

imposes a tax on everyone who holds money.

2

As Inflation falls, people make___

less trip to the bank and firms make less frequent price changes.

3

Inflation measured by___

percentage change in Consumer Price Index.

4

As Inflation rises, people make___

more frequent trip to the bank and firms make more frequent price changes.

5

Money demand refers to___

how much wealth people want to hold in liquid form

6

IF value of money on vertical axis, money supply is___

vertical.

7

Interest rates adjusted for effects of inflation are___
inflation is a___

real variables.
nominal variable.

8

IF CPI rises, number of dollars needed to buy a representative basket of goods___

increases, and so the value of money falls.

9

When prices are falling, there’s___

deflation.

10

When price level rises, number of dollars needed to buy a representative basket of goods___

increases, and so the value of money falls.

11

When money market is drawn w/ the value of money on vertical axis, money demand___

slopes downward and money supply is vertical.

12

Over the past 70 years, prices in the US have___

risen about 4% per year.

13

In the US, people required to pay taxes on___

nominal interest earnings, irrespective of their real interest earnings.

14

Market economies rely on relative prices to___

allocate scarce resources.

15

Hyperinflation refers to___

a period of very high inflation.