Consider the Statement "Inflation Is Everywhere and Always a Monetary

question 92

Multiple Choice

Consider the statement "Inflation is everywhere and always a monetary phenomenon." This statement does not hold true

• A)as long as demand and supply shocks are validated by expansionary monetary policy.
• B)if the economy's adjustment process is working effectively.
• C)for temporary bursts of inflation that are not accompanied by a monetary expansion.
• D)as long as the AD curve is shifting to the right at the same rate as the AS curve is shifting to the left.
• E)in industrialized economies.

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Definitions:

John Maynard Keynes

British economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments.

Aggregate Demand

Total economic desires for all goods and services at a uniform price level over a specific period.

Government Interference

Involvement by government in market operations, which can range from regulations and taxes to direct control and ownership of services.

Full Employment GDP

The output level of goods and services in an economy when all available labor resources are being used in the most economically efficient way.