Which of the following statements about the history of inflation in the U.S. is true?
a. Inflation averaged roughly 2% from 1950-19-65, but has fallen since then.
b. Inflation has averaged roughly 2% since 1950.
c. Inflation averaged roughly 2% from 1950-1965, rose until the early 1980s, and has fallen slowly since.
d. Inflation has gradually climbed since the 1950s.
C
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A rise in the price level
A) raises the buying power of money. B) decreases the prices of exports. C) lowers the buying power of money. D) increases aggregate demand. E) makes the aggregate demand curve steeper.
Under a fixed exchange standard, if the domestic demand for foreign exchange increases
A) the central monetary authority must meet the demand out of its reserves. B) the central monetary authority must increase the supply of domestic money. C) the fixed exchange standard will breakdown. D) inflation will increase. E) the domestic currency must be depreciated.