Which of the following is TRUE for the U.S.from 1995 to 2013?
A)the inflation rate fluctuated much less than the growth rate of M2
B)the inflation rate and the growth rate of M2 followed very similar patterns
C)the inflation rate averaged about 4 percent per year
D)the growth rate of M2 averaged about 8 percent per year
E)all of the above

Question

Quizplus · Accepted Answer

The inflation rate in the U.S. from 1995 to 2013 was relatively stable compared to the more variable growth rate of M2 (the money supply). This period includes times of economic expansion as well as the Great Recession, during which inflation was generally low and managed by monetary policy, while M2 growth rates were more responsive to Federal Reserve actions aimed at stabilizing and stimulating the economy.

Which of the Following Is TRUE for the U