To Explain the Long-Run Determinants of the Price Level and the Inflation

question 109

Multiple Choice

To explain the long-run determinants of the price level and the inflation rate, most economists today rely on the

• A)quantity theory of money.
• B)price-index theory of money.
• C)theory of hyperinflation.
• D)disequilibrium theory of money and inflation.

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Definitions:

Functional Theory

A theory proposing that societal institutions and phenomena exist because they fulfill essential functions for the sustainability of society.

Balance Theory

A theory in social psychology which suggests that individuals strive for consistency in their relationships, attitudes, and beliefs, leading them to change or avoid conflicting situations.

Ed Dislikes Joe

A simple statement reflecting interpersonal dissonance or negative feelings held by one individual towards another.

Attitude Change

The process by which an individual's feelings, beliefs, or behaviors towards an object, person, or situation are altered.