Substantial or persistent inflation is caused by _______.
a. banks that have market power and refuse to lend money
b. governments that raise taxes so high that it increases the cost of doing business and, hence, raises prices
c. governments that print too much money
d. increases in the price of inputs, such as labor and oil
e. none of the answer choices
In year two, the price of the same basket is $12.00. From year one to year two, there isdeflation at an annual rate of .
In year one, $65.00 will buy baskets, and in year two, $65.00 will buy baskets.
This example illustrates that, as the price level falls, the value of money .