Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

Question

inflation inflation rate real price v, velocity of money deflation disinflation money illusion real rate of return nominal rate of return Fisher effect monetizing the debt

the tendency of nominal interest rates to rise one to one with expected inflation rates. a reduction in the inflation rate. a decrease in the average level of prices; i.e., a negative inflation rate. a price that has been corrected for inflation; used to compare the prices of goods over time. the percentage change in the average level of prices (as measured by a price index) over a period of time . the nominal rate of return minus the inflation rate. the rate of return that does not account for inflation. the average number of times a dollar is spent on final goods and services in a year. an increase in the general or average level of prices. is when the government pays off its debts by printing money. the false perception that occurs when people mistake changes in nominal prices for changes in real prices.

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