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An increase in the price level is the same as a decrease in the value of money.

The quantity theory of money suggests that an increase in the money supply
increases real output proportionately.

If the price level were to double, the quantity of money demanded would double because people would need twice as much money to cover the same transactions.

In the long run, an increase in the money supply tends to have an effect on real variables but no effect on nominal variables.

If the money supply is €500, real output is 2,500 units, and the average price of a unit of real output is €2, the velocity of money is 10.

The Fisher effect suggests that, in the long run, if the rate of inflation rises from 3 per cent to 7 per cent, the nominal interest rate should increase by 4 percentage points and the real interest rate should remain unchanged.

An inflation tax is paid by those that hold money because inflation reduces the value of their money holdings.

Monetary neutrality means that a change in the money supply doesn't cause a change in anything at all.

Inflation erodes the value of people's wages and reduces their standard of living.

Inflation reduces the relative price of goods whose prices have been temporarily held constant to avoid the costs associated with changing prices.

The shoeleather costs of inflation should be approximately the same for a medical doctor and for an unemployed worker.

Inflation tends to stimulate saving because it raises the after tax real return to saving.

Governments that spend more money than they can raise from taxing or borrowing tend to print too much money which causes inflation.

If inflation turns out to be higher than people expected, wealth is redistributed to lenders from borrowers.

If the nominal interest rate is 7 per cent and the inflation rate is 5 per cent, the real interest rate is 12 per cent.

In the long run, inflation is caused by

When prices rise at an extraordinarily fast rate, it is called

If the price level doubles,

In the long run, the demand for money is most dependent upon the

The quantity theory of money concludes that an increase in the money supply causes a proportional

An example of a real variable is

The quantity equation states that

If money is neutral,

If the money supply grows 5 per cent, and real output grows 2 per cent, prices should rise by

The velocity of money is

Countries that employ an inflation tax do so because

An inflation tax

Suppose the nominal interest rate is 7 per cent while the money supply is growing at a rate of 5 per cent per year. If the government increases the growth rate of the money supply from 5 per cent to 9 per cent, the Fisher effect suggests that, in the long run, the nominal interest rate should become

If the nominal interest rate is 6 per cent and the inflation rate is 3 per cent, the real interest rate is

If actual inflation turns out to be greater than people had expected, then

Which of the following costs of inflation does not occur when inflation is constant and predictable?

Suppose that, because of inflation, a business in Russia must calculate, print, and mail a new price list to its customers each month. This is an example of

Suppose that, because of inflation, people in Brazil economize on currency and go to the bank each day to withdraw their daily currency needs. This is an example of

If the real interest rate is 4 per cent, the inflation rate is 6 per cent, and the tax rate is 20 per cent, what is the after tax real interest rate?

Which of the following statements is true about a situation where real incomes are rising at 3 per cent per year.