ECON 272

In Class Exercise Nine – Inflation and Deflation - Myths Surrounding Inflation

1.  Do unions cause inflation?  Explain. 

2.  What is the difference between the government deficit and the government debt?

3.  How does the government obtain revenue (over and above tax revenue) in order to operate with a deficit?  Which government agency oversees this activity (and what does it sell)?

4.  Does the government debt cause inflation?  Explain (why do people think it does?).

5.  Explain how the FED monetizes the debt.  Include the Treasury in your answer.

6.  What questions do you still have about this material?