51. In the classical model, the assumption that money is neutral implies that the aggregate supply curve is:
52. The total real revenue from the inflation tax can be decomposed into which two components?
53. In the Cagan model, the parameter \(\beta\) in the adaptive expectations formula \(dE/dt = \beta(C-E)\) represents:
54. Why might real money balances RISE towards the very end of a hyperinflation?
55. The concept of "monetarist superneutrality" as an empirical idea suggests that:
56. In Friedman's analysis of the demand for money, what is the primary budget constraint for an ultimate wealth-holder?
57. What is a key distinction between seigniorage and the inflation tax in a growing economy?
58. According to the Dornbusch model, a key factor that can turn high inflation into an explosive hyperinflation is:
59. In the welfare cost diagram for inflation, the area representing the inflation tax revenue is a rectangle with height equal to the inflation rate and width equal to:
60. The classical dichotomy refers to the idea that:
61. In the Cagan model, if the coefficient of expectation \(\beta\) is very high (close to 10.0), it implies that:
62. Which of the following is NOT one of the three main sources of runaway inflation discussed by Mizen?
63. In the IS-LM model, if the demand for money is perfectly interest-inelastic (a vertical LM curve), what is the effect of an increase in the money supply?
64. The 'real balance effect' breaks the superneutrality of money because:
65. According to Friedman's empirical propositions, how long is the total average delay between a change in monetary growth and a subsequent change in the rate of inflation?
66. In the context of the inflation tax, the "tax base" is:
67. The argument that inflation is "always and everywhere a monetary phenomenon" means that:
68. In the Cagan model, the elasticity of demand for real balances with respect to the expected rate of inflation is given by \(-aE\). This implies that the demand for money becomes more elastic as:
69. According to the subject guide, which author is primarily associated with the model of very rapid, but non-explosive, continuing inflation?
70. In the Dornbusch model of chronic inflation, where \(\pi = gV\), what happens if the government deficit (g) increases?
71. The analysis of the welfare cost of inflation using a consumer surplus diagram assumes that the social cost of creating additional fiat money is:
72. In Friedman's description of the transmission mechanism, the "income effect" on interest rates refers to:
73. The existence of the Mundell-Tobin effect implies that the IS curve, when drawn in (r, Y) space where r is the real interest rate, will:
74. In his 1956 restatement, Friedman argued that the velocity of money is:
75. The primary reason hyperinflations are ultimately stopped is that:
76. If the demand for real money balances is highly inelastic with respect to the nominal interest rate, the welfare cost of a given rate of inflation will be:
77. In the classical model, if the labor supply is a positive function of the real wage, an increase in the capital stock (k) would lead to:
78. The term "full liquidity" as used by Friedman refers to a situation where:
79. According to the monetarist view, how does fiscal policy (e.g., an increase in government spending financed by borrowing) primarily cause inflation?
80. In the Cagan model, the relationship \(d \log(M/P)/dt = -\alpha \cdot dE/dt\) implies that:
81. If a country experiences a one-time jump in its price level with no change in the long-run inflation rate, this is most likely due to:
82. The efficiency of the inflation tax is low (i.e., the welfare cost per unit of revenue is high) when:
83. In the classical model, the demand for labor is determined by the point where:
84. Which historical event is often cited as a key reason for the decline of simple Keynesianism and the revival of the quantity theory in the 1970s?
85. In Friedman's view, the demand for money by a business enterprise is best viewed as a decision related to:
86. The primary channel through which an external debt crisis can lead to high domestic inflation is:
87. If a country experiences a one-time jump in its price level with no change in the long-run inflation rate, this is most likely due to:
88. In the context of hyperinflation, the term "dollarization" refers to:
89. The analysis of the return on equities in Friedman's framework treats them as equivalent to:
90. A key finding from Cagan's empirical study of seven hyperinflations was that:
91. In the welfare analysis of inflation, moving from a positive inflation rate to the optimal rate (Friedman's rule) involves:
92. The Cambridge cash-balance version of the quantity equation (M = kPY) emphasizes the role of money as a:
93. A key reason that even mild, steady inflation is considered undesirable in actual economies is that:
94. In the context of the classical model, what does the term "dichotomize" mean?
95. According to Dornbusch, why is an incomes policy (like freezing wages and the exchange rate) often a necessary component of a stabilization program?
96. If the government finances its deficit entirely by printing money, the real value of the deficit is equal to:
97. In the context of the classical model, an increase in government purchases (g) financed by taxes will:
98. The primary reason that the simple Keynesian model with a fixed nominal wage is unsuitable for analyzing steady, ongoing inflation is that:
99. In the Cagan model, if the money supply is held constant but people suddenly expect a currency reform that will stop inflation, what will happen to the current price level?
100. In the Dornbusch model of chronic inflation where \(\pi = gV\), if velocity (V) is an increasing function of inflation (\(V(\pi)\)), what ensures a stable low-inflation equilibrium?