The best definition of inflation is
a. a temporary increase in prices.
b. an increase in the price of one important commodity such as food.
c. a persistent increase in the general level of prices as measured by a price index.
d. an increase in the purchasing power of the dollar.
C
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How does the use of credible threats or empty threats by firms affect outcomes and the Nash equilibrium in one-period games?
What will be an ideal response?
In the past, some governments' budget deficits became so large that they could not raise sufficient taxes to finance the spending, so they ________, which led to ________.
A. printed large quantities of paper money; hyperinflation B. reduced the amount of currency held by the public; a smaller money supply C. increased bank reserves; a larger reserve/deposit ratio D. ordered the central bank to sell government bonds; an increase in the money supply