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True-False with explanation
A monetary expansion only changes inflation on the long run
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- stant, does this zero-inflation goal require that the rate of money growth equal zero? If yes, explain why. If no, explain what the rate of money growth should equal. 4. The economist John Maynard Keynes wrote in The Economic Consequences of the Peace (1919): "Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can con- fiscate, secretly and unobserved, an important part of the wealth of their citizens." Justify Lenin's assertion. 5. Suppose that a country's inflation rate increases sharply.. What happens to the inflation tax on the holders of money? Why is wealth that is held in savings accounts not subject to a change in the inflation tax? Can think of any way in which holders of savings accounts are hurt by the increase in the inflation rate? you 12 6. Hyperinflations are extremely rare in countries whose central banks are independent of the rest of the ernment. Why might…How does money of stable value influence the volume oftrade? When the inflation rate is volatile, how is the volumeof trade affected? How will this influence the income levelsof people?Inflation and international tradeIdentify which statements are true and which ones are false. For all statements, briefly explain why they are true or false. a) Economists projected inflation rate to be 4% in 2022 in country X. In reality, inflation rate was 7%. Borrowers in country X are better off.b) The government in country X decided to print more money and give transfers of $1,000 to citizens who recently retired. It will cause a decrease in money supply, so the value of money will increase, and prices will decrease.c) Countries X and Y are neighbors. When the government in country X decides to print more money, the value of currency of country Y increases, so this currency appreciates, while the currency of country X depreciates.d) Budget surplus in country X causes a shift of the supply curve for loanable funds to the left, so the real interest rate increases. Then, the net capital outflow decreases, and hence the real exchange rate decreases
- Identity several parties likely to he helped and hurt by inflation.Brazil began indexing various categories of income to a. slow inflation. O b. keep prices from rising even faster. O c. improve a balance of payments deficit. O d. protect citizens from the effects of inflation.1. a) Is the following graph about the "Purchasing Power of the Diminishing Dollar" misleading? Why or why not? GELİNAARADICS ANKAPILA 1998-ESENHOWR$1.00 WERNER FALT THE END OF AMERICA ELEMEN 5-% JUVE SANA 1993-MINNE94 THE EMERS Purchasing Power of the Diminishing Dollar 1968-JOHNSON 1973-MXON M 1978-CARTER A b) Provide a time-series graph that accurately reflects the data: [(1978- Carter, $0.44), (1973- Nixon, $0.64), (1968- Johnson, $0.83), (1963- Kennedy, $0.96), (1958-Eisenhower, $1.00).
- Time let Assume that initially PPP holds, the theory of PPP suggests that if the inflation rate in your country is lower than the inflation rate in the US, its currency is and should Select one: O a. overvalued; appreciate O b. undervalued; appreciate O c. remain unchanged Od. overvalued; depreciate O e. undervalued; depreciate NeHow does high inflation lead to a recession in the country? Explain the role ofthe Government and the Central Bank to address the economic recessionproblem by using appropriate fiscal and monetary policies. Are there anypotential problems with such policies? Please answer in detailAssume that initially PPP holds, if the inflation rate in your country falls relative to the inflation rate in the United and will States. The domestic currency is. Select one: a. undervalued; depreciate O b. overvalued; depreciate O c. remain unchanged O d. overvalued; appreciate O e. undervalued; appreciate
- Goverment should focus on a- long run growth and controling defalation b- lon run growth and controllin inflation c- short run groth and controllin deflation d short run growth and controlling inflationIs a world without inflation possible? What would be the implication of having a world without inflation? JustiyWhat are the chances of MMT becoming the prevailing policy after the COVID crisis? Are we already doing MMT without knowing it? Professor Kelton says we shouldn't worry about inflation (we've haven't had much in the last 20 years) her critics disagree because they believe MMT pushes the envelope toward inflation. can yoy please explain im confuse
