Homework Answers
False
It may experience inflation. As we know that money inflation means a situation when money becomes less valuable which implies that you need more money to buy same goods which you could have bought with less money earlier.
Now suppose we use some rare element as a medium of exchange. But somehow we suddenly experience excess supply of that rare material, now it's not as rare as before, therefore this commodity money as medium of exacange will lose its value, hence experiencing inflation.
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An economy that uses commodity money will not experience inflation. O True O False
True or False: Demand-pull inflation exists when an economy experiences inflation and high unempl...
True or False: Demand-pull inflation exists when an economy experiences inflation and high unemployment simultaneously. True False Adjust the following graph to show demand-pull inflation. Aggregate Demand Aggregate Supply Aggregate Supply Aggregate Demand REAL GDP Demand-pull inflation results in ▼ price level, real GDP and ▼ employment.
True or False: Demand-pull inflation exists when an economy experiences inflation and high unemployment simultaneously. True False Adjust the following graph to show demand-pull inflation. Aggregate Demand Aggregate Supply Aggregate Supply Aggregate Demand...
QUESTION 4 True or False: The difference between commodity money and fiat money is that one...
QUESTION 4 True or False: The difference between commodity money and fiat money is that one has inherent value and the other is money that is used to buy an Italian car. True False QUESTION 5 People hold currency for three reasons, one of which is the transactions motive (ie, the need to conduct a transaction using currency). Of the following, which would have the smallest transactions motive? A drug dealer A gambling bookie The purchasing department of IRSC A...
True or false According to the Monetarists, excessive increase in Money Supply causes inflation
True or false According to the Monetarists, excessive increase in Money Supply causes inflation
True or False: Interest is the cost of borrowing money. Select one: O True O False
True or False: Interest is the cost of borrowing money. Select one: O True O False
True/False 25% Indicate whether the statement is true or false 1 Unemployment and inflation are important...
True/False 25% Indicate whether the statement is true or false 1 Unemployment and inflation are important determinants of short-run material welfare, whereas productivity growth is an important determinant of long-run material well-being Economists disagree on most economic issues facing an economy. 2. 3. Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation. The slope of a line with rise of five and run of two is positive. 4. 5. Slope will...
1. What is money? In the contemporary global economy, why has fiat money supplanted commodity money...
1. What is money? In the contemporary global economy, why has fiat money supplanted commodity money in economic and financial transactions? 2. Discuss the importance of depository institutions in the contemporary global financial system. Over the years, some banks have failed woefully; with reference to any two banks, briefly explain the reasons for bank failures Please answer in full sentences. thank you
True or False: explain your answer the nominal tariff on a commodity is higher than the...
True or False: explain your answer the nominal tariff on a commodity is higher than the nominal tariff on the imported input used in the production of the commodity, then the rate of effective protection is higher on the commodity than on the input.
Milton Friedman once stated that inflation is always and everywhere a monetary phenomenon, meaning that an...
Milton Friedman once stated that inflation is always and everywhere a monetary phenomenon, meaning that an economy must use money to experience inflation. Using the definition of inflation, explain why his statement is true by considering if inflation could exist in an economy that does not use money, ie. a barter economy. What one of the functions of money is most relevant in explaining this result?
Consider an economy with the following Money market information. Is the past year inflation rate was...
Consider an economy with the following Money market information. Is the past year inflation rate was 4%, the output grew by 5%, and the nominal interest rate on non-monetary assets grew by 2.5%. Moreover, we know that the central bank of this economy increased the Money supply of economy by 6%. As an economist you know that the interest elasticity of Money demand of this economy is -0.2. However, you don’t have any information about the income elasticity of Money...
Label the following statements true or false and justify your answer. (a) Suppose that the money...
Label the following statements true or false and justify your answer. (a) Suppose that the money supply is growing at 10%. If the velocity of money is falling at 10%, then inflation is zero. (b) Suppose that inflation equals the growth rate of the money supply. Then seigniorage revenues are growing over time.
True or False: Demand-pull inflation exists when an economy experiences inflation and high unemployment simultaneously. True False Adjust the following graph to show demand-pull inflation. Aggregate Demand Aggregate Supply Aggregate Supply Aggregate Demand REAL GDP Demand-pull inflation results in ▼ price level, real GDP and ▼ employment.
True or False: Demand-pull inflation exists when an economy experiences inflation and high unemployment simultaneously. True False Adjust the following graph to show demand-pull inflation. Aggregate Demand Aggregate Supply Aggregate Supply Aggregate Demand...
QUESTION 4 True or False: The difference between commodity money and fiat money is that one has inherent value and the other is money that is used to buy an Italian car. True False QUESTION 5 People hold currency for three reasons, one of which is the transactions motive (ie, the need to conduct a transaction using currency). Of the following, which would have the smallest transactions motive? A drug dealer A gambling bookie The purchasing department of IRSC A...
True or False: Interest is the cost of borrowing money. Select one: O True O False
True/False 25% Indicate whether the statement is true or false 1 Unemployment and inflation are important determinants of short-run material welfare, whereas productivity growth is an important determinant of long-run material well-being Economists disagree on most economic issues facing an economy. 2. 3. Individuals will have different value judgments about the appropriate rate of unemployment and the appropriate rate of inflation. The slope of a line with rise of five and run of two is positive. 4. 5. Slope will...
Milton Friedman once stated that inflation is always and everywhere a monetary phenomenon, meaning that an economy must use money to experience inflation. Using the definition of inflation, explain why his statement is true by considering if inflation could exist in an economy that does not use money, ie. a barter economy. What one of the functions of money is most relevant in explaining this result?
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