Question

question (logical reasoning)

Inflation can only be fundamentally caused by...

Answer 1

I think it's option e.)

Answer 2

I don't understand what "reallocation of demands" mean?

Answer 3

aren't b and c the negatives of each other? i.e. both can't be true.

Answer 4

yeap, b) will lead to "deflation"

Answer 5

yea b.) and c.) look opposite

Answer 6

d) is not true on a pre-bank economy either

all others are true thojugh

Answer 7

by the way answer given is b.) , but i dont know if other options are also in

Answer 8

well... I should say all others BUT e) =)

Answer 9

e.) is given incorrect

Answer 10

that leaves a,b and d

Answer 11

hmmm well... I see b) happening
the gold increases, the money supply increases, folks have more money, chasing few goods and services, so, more people want to pay boatloads for a cheesy pencil, so the pencil goes to the highest bidder, thus with an "inflated price"

Answer 12

what about option a.)

Answer 13

a) is almost a given, on a pre-bank or current economy

Answer 14

I would say not a) because a says any (i.e. all ) inflation is due to supply, but according to the info, inflation can also arise from an increase in gold.

Answer 15

c is false based on the info given

d is probably true, but none of that info is given in the info.
remember, we have to only use the info provided. so rule that out.

b is true,

so I would choose b for this

Answer 16

I think is more than one applicable =)

Answer 17

ok thanks

Answer 18

no only one option can be chosen

Answer 19

phi always gives correct answer

Answer 20

d) is unlikely, not improbable though
c) is almost a given, assuming the gold is tied to money supply
b) true
a) is ambiguous
e) not true
=)

Answer 21

i also noticed that word "gold" is given in only option b.) and pre-banking statement in the paragraph

Answer 22

and option c.) it negates option b.)

Answer 23

hmmmm

Answer 24

let's see hmmm gold goes down, less money circulating
hmmm I think I see it
folks are broke, can't buy expensive, prices need to fall not exactly inflation but deflation

yes

Answer 25

I think a is false because inflation doesn't have to happen due to reduction of supplies
it can happen due to increase in demand

b looks good too since gold=demand => inflation

c I don't know what other things being equal means

d we weren't given that demand depended on supplies

Answer 26

so b looks good to me
but I can't make sense of c

Answer 27

i also don't like economics :p

Answer 28

heheh

Answer 29

this is logical reasoning not economics a paragraph is given and u have to deduce an answer

Answer 30

well, C is false :)
less gold, means less money in hands, folks can't afford expensive prices
so stores need to drop their prices to be able to sell anything
so, is "deflation" due to gold decrease

Answer 31

i figure that
I was just trying to comment on the economics terminology
and I put a cute little face

Answer 32

all that said, I always wondered the "placebo effect" of gold on societies, and not just current ones, but ancient ones
it's just some dumb metal
sure is shiny, so it's steel and copper, dohh =)

Answer 33

diamond is a bigger fraudlent

Answer 34

I"m going to say b as well. :P Even though i don't understand what "reallocation of demand" mean, it is still a possible factor so a is false since inflation could also be caused by the reallocation of demand. Apparently c is false so d is false... leaving just b. b also seems to make sense :)

Answer 35

I dislike to sound a bit biased, but females are big co-conspirators on the diamonds prices =)

I can care less for it, though they're good for some machineries though