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1.Which of the following is an example of inflation according to the textbook definition?
a. The price of steel increased in the month of March but did not increase in January or February. It is not expected to increase in April.
b. The price of steel increased in 2008
c. The general price level (or the average price level for all goods) has been increasing from the base year to the current year.
d. The price of steel increased in 2008 and 2009 (up to March)
A general increase in the prices and fall in value of money: c. The general price level (or the average price level for all goods) has been increasing from the base year to the current year.

2.Inflation can be caused by cost-push or demand-pull factors. Where does each type of inflation originate and what are some examples? You answer is
a. Cost-push factors originate in the public sector. Example: increase cost of production. Demand-pull factors originate in the private sector. Example: decrease in aggregate supply.
b. Cost push factors originate in the private sector. Example: increase cost of production. Demand-pull factors originate in the private sector. Example: increases in money supply
c. Cost push factors originate in the private sector. Example:An increase cost of production. Demand-pull factors originate in the private sector. Example: increases in budget deficits by the government
d. Cost-push and demand-pull factors originate in the public sector. Examples are increase cost of production and increased in the aggregate supply.
Demand push originates in the increase in money supply whereas cost push originates in the public sector. b. ...

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Macro Economics: Money and Growth

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I used to think that for growth to take place, banks had to lend out more than they had (fractional reserve, credit) and that this would lead to an increase in aggregate demand and production. Apparently, however, if velocity of money increases we can also have growth. Does this mean that if the money supply never increased (credit via banks stopped altogether) that the aggregate demand and subsequent growth to meet that demand could still occur?

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