A scatter diagram of money growth rates and inflation rates from 1982 to 2010 indicates
A. a clear direct relationship between money growth and inflation.
B. a clear indirect relationship between money growth and inflation.
C. no clear relationship between money growth rates and inflation.
D. that inflation is always and everywhere a monetary phenomenon.
Answer: C
You might also like to view...
Job rationing occurs if
A) the Lucas wedge is positive. B) the minimum wage is set below the equilibrium wage rate. C) an efficiency wage is set below the equilibrium wage rate. D) the real wage rate is pushed above the equilibrium wage rate. E) a union wage is set below the equilibrium wage rate.
Equilibrium in the loanable funds market is initially present at a stable price level (zero inflation) and a nominal (and real) interest rate of 4 percent. If a shift to expansionary monetary policy eventually leads to actual and expected inflation of 6 percent,
a. both the nominal and real interest rates will rise to 10 percent. b. the nominal interest rate will rise to 10 percent, but the real interest rate will remain at 4 percent. c. the real interest rate will rise to 10 percent, but the nominal interest rate will remain at 4 percent. d. both the real and nominal interest rates will remain at 4 percent.
Which of the following explains why investment may be procyclical?
a) high installation costs for replacing, updating, and expanding the capital stock b) simultaneous investment by firms in various industries throughout the economy c) the correlation between current profits and investment expenditures d) the basing of expectations on current conditions e) all of the above
Costs of unemployment include
A. structural unemployment. B. reduction in the labor force. C. the output lost due to the fact that the economy is not running at full employment. D. higher wages.