Hyperinflation is usually caused by a combination of:
business greed (high prices) and increasing wage demands by unions
too much government spending and too little taxation
None of the listed answers is correct
too much money in circulation and increased velocity
high taxes and excessive regulations by the government
According to our text, which of the following is correct about inflation measures?
All of the above are true
Inflation measures like the CPI and the PPI take quality changes of products into account If a product increases in quality over time, the price increase is adjusted to reflect the greater quality of the product
None of the above is true
Inflation measures are accurate because government statisticians receive information from millions of retail stores who report price changes of their products
The GDP price deflator provides a list of products whose prices have decreased over time Most of these products are high-tech products and services
Let’s say that we are operating in a constant money supply economy This year technology causes our aggregate supply to increase Ceteris paribus, which of the following do you expect to happen?
Prices will fall and average real incomes will fall
Prices will rise and average nominal incomes will fall
Prices will fall and average real incomes will increase
Prices will rise and average nominal incomes will increase