Inflation is a process in which ________________________________.

the value of money is increasing
demand always increases
the price level is rising
the price level of certain commodities increase

Demand-pull inflation is an inflation that results from an initial _____________.

increase in the money price of raw materials
decrease in aggregate demand
increase in aggregate demand
increase in the money wage rate

Cost-push inflation is an inflation that results from an initial ________________.

increase in investment
decrease in taxes
increase in the money wage rate or the money price of raw materials
increase in taxes

Stagflation is the combination of a ______________ and a ______________.

fall in inflation; rise in real GDP
rise in inflation; fall in real GDP
rise in the price level; fall in real GDP
fall in the price level; rise in real GDP

An unanticipated inflation redistributes income so that _____________.

there is high unemployment
employers sometimes gain and sometimes lose
employers gain at the expense of the workers
workers gain at the expense of the employers

The forecast of inflation that is based on all the relevant information is called a ________________.

rational expectation
rational inflation expectation
rational inflation rate
national inflation rate

A more direct way to study inflation and unemployment is by using _______________.

a Phillips curve
data from high inflation countries
data from the OECD
the AS-AD model

The short-run Phillips curve shows the tradeoff between _______, holding the expected inflation rate and the natural unemployment rate constant.

inflation and employment
the price level and real GDP
inflation and unemployment
the price level and unemployment

The long-run Phillips curve is __________________________.

vertical at the actual inflation rate
horizontal at the actual inflation rate
vertical at the natural rate of unemployment
horizontal at the expected inflation rate

The proposition that in the long run an increase in the quantity of money brings an equal percentage increase in the price level is the _________________.

inflation theory of money
quantity theory of money
equation of exchange
velocitiy of circulation

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