Who regulates the quantity of money circulating in the economy?

A Californian student consumes Internet services (I) and books (B)

Her preferences are represented by a Cobb-Douglas utility function of the type: U(I,B) = I.5B.5. Initially Y = 100, PI = PB = 1. Lately, however, because of the electricity shortage, the price of the Internet services has increased to 2. The government has decided to give a transfer to the student so that she can recover her initial welfare. In order to determine the transfer the government has hired three consultants who have made the following suggestions: Consultant A: The transfer should allow the student to buy her initial bundle. Consultant B: The transfer should allow the student to get her initial level of utility. Consultant C: The government should give her a transfer of 20. a. Using the expenditure function, find the amount of the transfer implied by consultant A. b. Find the amount of the transfer implied by consultant B. c. Determine whether the consumer is better or worse off from Consultant C's suggestion than before the price increases.

Which of these statements describes inflation? a. It refers to the temporary rise and fall in the price of a particular good in a market. b. It refers to a one-time shift in the equilibrium price of a good

c. It refers to an increase in the demand for a particular good. d. It refers to an ongoing increase in prices from year to year.