Moderate inflation has positive effects on the economy
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1.How does each of the following actions by the FED (traditionally) influence the monetary base and the money supply?
a. an increase in the required reserve ratio
b. a decrease in the disocunt rate
c. buying gov't secutitires from banks.
2.Which is worst for the economy, moderate deflation or moderate inflation?
3. What are some resons that US returing to the gold standard might not be such a great idea?
What are the effects of inflation on an economy? What are the effects of deflation? How does the Consumer Price Index work?
