TRUE OR FALSE 1- Inflation occurs when the amount of money grows faster than the

Q: TRUE OR FALSE 1- Inflation occurs when the amount of money grows faster than the

1. False Explanation: Inflation happens when the amount of money grows faster than the real GDP and not the potential GDP. 2. False. Explanation: In stagflation, inflation rate increases and real GDP goes down.

ID: 1129143 • Letter: T

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TRUE OR FALSE

1- Inflation occurs when the amount of money grows faster than the potential GDP.

2-In a stagflation the general level of prices is reduced and real GDP increases.

3-The general theory of the economic cycle states that the potential GDP fluctuates while the aggregate demand remains constant.

4-The short-term Phillips curve shows the relationship between inflation and unemployment, keeping the expected inflation rate and the natural unemployment rate constant.

5-Economic cycles are easy to describe, but difficult to explain ..

Explanation / Answer

1. False

Explanation: Inflation happens when the amount of money grows faster than the real GDP and not the potential GDP.

2. False.

Explanation: In stagflation, inflation rate increases and real GDP goes down.

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TRUE OR FALSE 1- Inflation occurs when the amount of money grows faster than the

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