1. Which of the following is TRUE about hyperinflation? A) It occurs when increased aggregate demand increases money velocity, which in turn increases inflation B) It occurs when higher prices reduce money velocity, which in turn increases inflation C) It occurs when increased velocity increases inflation, which in turn increases aggregate demand D) It occurs when inflation increases money velocity, which in turn increases inflation 2. The long run Phillips Curve is vertical because in the long run: the unemployment rate will equal its natural rate. there is no tradeoff between inflation and unemployment. C) All of these are correct. D) real GDP will be equal to its natural, or potential, level. 3. Economist A.W. H. Phillips noticed that there appeared to be a tradeoff between: A) interest rates and tax rates. B) tax rates and inflation. C) unemployment and interest rates ) inflation and unemployment. 4. The problem with an inflationary recession is that: rising prices are bad for households because wages are fixed. B) it may give rise to a permanent recession. C) policymakers cannot fight both inflation and a recession. D) it cannot be modeled using aggregate demand and aggregate SUPPLY