Question

Junly 8. Which of the following statements is correct? A During the 1990s, U.S. Inflation averaged about 2 percent per year. B. A period of hyperinflation is a period of extraordinarily low inflation C A period of deflation is any period during which the inflation rate is decreasing. D. All of the above are correct. E A and B. only 9. Which of the following statements about the classical dichotomy is (are) correct? (X) According to the classical dichotomy, an increase in the money supply will not affect nominal GOP but it will cause an increase in the price level if the velocity of money is constant (y) The classical dichotomy refers to the idea that money determines nominal variables such as nominal GDP and nominal wages, but not real variables such as real GDP and the real interest rate (2) According to the classical dichotomy, a decrease in the money supply will not affect real GOP but it will cause a decrease in the price level if the velocity of money is constant A (x) ly) and (2) B. (x) and (y) only C. (x) and (z) only D y) and z) only Ey only

Answer 1

bbb k Dog Auswvee is (A) Reving 1990s, us reflatrai averaged about zy, bu Зал While other optious are wrong incomect → Deflation = negative inflation I not a fall in inflation rate Hyperinflation is a pelod of extaadiuary high Inflation Ahis is (A) y la only (*) is incorect because increase in money supply as pee classical dichotony will affect nominal 4DP hot and also causing au increase in pulu level of the velocity of money is constant Classical dichotany basically proposes compartmentalization of money & goods Omarket Where monetary variable do not affut real voulables e vice versa. O Scanned with CamScanner