Question

1. match the following terms to descriptions:
2. velocity of money
3. deflation
4. inflation targeting

a. falling price levels and increasing money value
b. speed money circulates in the economy
c. central bank policy to keep inflation low

Explanation:

• Velocity of money refers to the speed at which money circulates in the economy.
• Deflation is characterized by falling price levels and an increase in the value of money.
• Inflation targeting is a central bank policy aimed at keeping inflation low.

Answer:

1. b. Speed money circulates in the economy
2. a. Falling price levels and increasing money value
3. c. Central bank policy to keep inflation low