Question 1

​Which of the following is NOT correct?
A)​In 2015, the inflation rate was 7.8 percent in the U.S.
B)​In 2015, the inflation rate was 84.1 percent in Venezuela
C)​​In 2015, the inflation rate was 4.9 percent in India
D)​​In 2015, the inflation rate was 1.5 percent in China.

Accepted Answer

In 2015, the inflation rate in the U.S. was approximately 0.1%, not 7.8%.

Question 2

Hyperinflation can be explained by
A)​the market for loanable funds.
B)​the quantity theory of money.
C)the velocity theory of money.
D)​the market for federal funds.

Accepted Answer

Hyperinflation is often explained by the quantity theory of money, which states that hyperinflation occurs when the money supply grows too quickly relative to the output of the economy. This can lead to a rapid decrease in the value of the currency, resulting in higher prices for goods and services.

Question 3

Economists agree that
A)neither high inflation nor moderate inflation is very costly.
B)both high and moderate inflation are quite costly.
C)high inflation is costly, but they disagree about the costs of moderate inflation.
D)moderate inflation is as costly as high inflation.

Accepted Answer

Economists generally agree that high inflation is costly due to its negative effects on the economy, such as eroding purchasing power and creating uncertainty. However, there is less consensus on the costs of moderate inflation, with some economists arguing it can be beneficial or manageable.

Question 4

Which of the following did NOT happen during the late 19th century in the U.S.?
A)Falling crop prices reduced farmers' incomes
B)From 1880 to 1896, the price level fell by 23 percent
C)Farmers lobbied for government policies to reduce inflation
D)​Farmers had reduced ability to pay off debts

Accepted Answer

Farmers lobbied for government policies to increase inflation, not reduce it, as they wanted higher prices for their crops to improve their financial situation.

Quiz 30: Money Growth and Inflation

​Which of the following is NOT correct?

Hyperinflation can be explained by

Economists agree that

Which of the following did NOT happen during the late 19th century in the U.S.?

Which of the following is NOT correct?