1. The lower growth in the money supply, the higher is the inflation rate. True False

2. If a market basket was defined in 1998(base year), it cost $10,000 to purchase the items in that basket in 1998 and cost $11,000 to purchase those identical goods in 1999, then the consumer price index for the base year is A. (10000/11000)*100=90.9.

B. (11000/10000)*100=110.

C. none of these

D. 100.