To expand the money supply the Fed could lower the required reserve ratio, lower the discount rate, or purchase government securities

When a price index moves from 105 to 108, the rate of inflation is 3 percent

a. True b. False Indicate whether the statement is true or false

Which of the following could the government do to decrease the costs of inflation without lowering the inflation rate?

a. Avoid unexpected changes in the inflation rate. b. Rewrite the tax laws so that nominal gains were taxed instead of real gains. c. Make policy that would discourage firms from issuing indexed bonds. d. All of the above are correct.