Inflation

Inflation

Multiple Choice

Which of the following variables is not included into the quantity equation:

• number of consumers

• velocity

• price

• transactions

Multiple Choice

Transactions velocity of money is the number of times in a year that goods or services are exchanged for money.

• true

• false

Multiple Choice

Which variable from the quantity equation is replaced in income equation:

• money

• velocity

• price

• transactions

Multiple Choice

The number of transactions is difficult to measure, that is why it is replaced by total output of economy.

• true

• false

Multiple Choice

With which of the given ways to finance government spendings seigniorage is connected:

• printing money

• taxation

• borrowing

• none of the answers is correct

Multiple Choice

Inflation can be viewed as a tax on holding money.

• true

• false

Multiple Choice

Fisher effect is:

• one-for-one relation between the inflation rate and the nominal interest rate

• one-for-one relation between the real and the nominal interest rate

• one-for-one relation between the inflation rate and the real interest rate

• none of the answers is correct

Multiple Choice

According to the Fisher equation, an increase in the rate of money growth of 1 percent causes a 1 percent increase in the rate of inflation.

• true

• false

Multiple Choice

Distinction on ex post and ex ante interest rate incorporates into the Fisher effect:

• all the answers are correct

• expectations

• ex ante real interest rate

• market equilibrium

Multiple Choice

The real interest rate that is actually realized is called ex ante.

• true

• false

Open questions

• Group 1: What are the costs of expected inflation?

• Group 2: What are the costs of unexpected inflation?

• Group 3: When and how inflation can be beneficial?

• Group 4: What are the costs of hyperinflation?

• Group 5: What are the causes of hyperinflation?

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