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The cause of inflation is

a. increased money supply, relative to the supply of goods and services

b. more goods and services being sold

c. a decrease in the money supply, relative to population

d. drastic decreases in demand for goods and services

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Yusra Anees
Yusra AneesLv10
13 Jan 2021

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Related questions

21 If the Federal Reserve reduced its reserve requirement from 6.5 percent to 5 percent. This policy would most likely:

A. decrease both the money multiplier and the money supply

B. decrease the money multiplier but increase the money supply

C. increase both the money multiplier and the money supply

D. increase the money multiplier but decrease the money supply

23 Real gross domestic product is best defined as

A. the market value of all final goods and services produced in an economy, stated in the prices of a given year

B. the market value of goods and services produced in an economy, stated in current-year prices

C. all goods and services produced in an economy, stated in the prices of a given year and multiplied by quantity

D. the market value of intermediate goods and services produced in an economy, including exports

If P denotes the price of goods and services measured in terms of money, then
a.1/Prepresents the value of money measured in terms of goods and services.
b.P can be interpreted as the inflation rate.
c.the supply of money influences the value of P, but the demand for money does not.
d.All of the above are correct

A. A decrease in aggregate supply can result in:

  1. a recession
  2. cost-push inflation
  3. demand-pull inflation
  4. unemployment 

B. In the short run (intermediate-range) of the aggregate supply curve, higher aggregate demand will increase

  1. the price level but reduce real GDP.
  2. real GDP without raising the price level
  3. the price level without affecting real GDP
  4. both the price level and real GDP

C. Which of the following helps explain why real GDP is inversely related to the price level within the framework of the AD-AS model?

  1. As prices fall, domestic consumers have an incentive to buy more of the cheaper goods and services
  2. As prices fall, the wealth of people holding the fixed quantity of money increases, causing them to expand their purchases of goods and services
  3. As prices fall, the government will have to reduce taxes, which will lead to an increase in the number of goods and services purchased
  4. As prices fall, the monetary authorities will have to increase the money supply, which will lead to an increase in the number of goods and services purchased

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