True or False? 1 Hyperinflation is defined as inflation of 45 percent per year o

Question

True or False?

1 Hyperinflation is defined as inflation of 45 percent per year or more.

2 In the long run, the central bank can lower inflation by increasing the money supply.

3 according to the quantity equation of money, the ibflation rate is given by = %change in M - % change in Y

4 the quantity equation of exchange shows the relationship between total spending in an economy and money supply.

5 velocity is defined as the rate of inflation acceleration.

6 contries that exhibit high money growth rates usually experience high inflation rates.

7 if inflation is sufficiently high, savers can face a negative real interest rate.

8 The european central bank explicitly states that its long run inflation target is 2 percent. if you know that the eurozone average growth rate of nominal gdp is 3 percent, you would tell the ecb to maintain its long run money growth rate at 4 percent in order to guarantee its inflation target.

Explanation / Answer

(1) True.

(2) True

(3) False

(4)True

(5) False

(6) True

(7)True

(8) True

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