Question

Hyperinflation can be thought of as a monetary policy phenomenon. True False An increase in the...

Hyperinflation can be thought of as a monetary policy phenomenon.

True

False

An increase in the velocity of money can cause an increase in real GDP.

True

False

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Homework Answers

Answer #1

1.

False.

Monetary policy is generally are of two types that are expansionary and contractionary

In expansionary monetary policy, the goal is to increase the money supply in the economy by lowering interest rate

In this the consumer buys the Government bonds

Opposite to it is contractionary monetary policy in which the goal is to reduce the money supply

Hyperinflation causes when there is excess

Inflation is the general rise in the price level of goods and services in an economy over a given period of time

Hyperinflation is a phenomenon that is occured by the demand and supply not the monetary policy

2.

True

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