A. QUOTEDC. THOUGHTII. FILL EACH GAP IN THE PASSAGE BELOW WITH ONE...

75. A. quotedC. thoughtII. Fill each gap in the passage below with ONE appropriate word. (20pts)AN ECONOMIC PROBLEMInflation is not a new phenomenon, (0) ….but… one that has existed at various times in variousplaces. In _____ (76) severest form; however, hyperinflation can destroy a nation's economy. _____(77) happened in revolutionary France and Weimar Germany; _____ (78) bundles of notes wereneeded to pay for a loaf of bread. But what is inflation? Briefly, it may be defined as a continualincrease in prices affecting the economy. The rate of inflation is determined _____ (79) changes in theprice level, which is an average of all prices. When _____ (80) prices rise while others fall, this willnot necessarily affect the price level, as inflation occurs _____ (81) if most major prices increase. Theproblem with inflation is that it reduces the value of purchasing power of money, as well as erodingpeople's savings. Wage increases which are below or equal _____ (82) the level of inflation will resultin a declining or static _____ (83) of living for workers, while wage increases above the rate ofinflation will merely stoke the fire for further inflation. So what can a government do to stop theprocess? It can increase taxes, raise interest rates, decrease the money supply, reduce governmentspending or set a ceiling _____ (84) price and wage rises. Why none of these is a popular measure isunderstandable, but if they reduce inflation _____ (85) a mild two to four percent per annum, asopposed to allowing it to rise to double-digit severe inflation, it is preferable in the long run.III. Read the following passage and choose the best answer (A, B, C or D) according to the text.