Define hyperinflation. Do you think it is beneficial to an economy?
If the money supply is growing at a rate of 6 percent per year, real GDP is growing at a rate of 3 percent per year,and velocity is constant, what will the inflation rate be? If velocity is increasing 1 percent per year instead of remaining constant, what will the inflation rate be?
Will increases in government spending financed by borrowing help promote a strong recovery from a severe recession? Why or why not?
Outline the supply-side view of fiscal policy. How does this view differ from the various demand-side theories?
Would a supply-side economist be more likely to favor a $1,000 rebate to all taxpayers or an equivalent reduction in marginal tax rates? Why?
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