Explain the meaning of inflation, Microeconomics

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Problem 1:

(a) Explain the meaning of inflation.

(b) "Inflation is always and everywhere a monetary phenomenon." Discuss this statement.

(c) Briefly explain the link between budget deficits and inflation.

Problem 2:

Determine the monetary policy tools that the Central Bank can use to manipulate the money supply and assess the effectiveness of each of the policies.


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