The economy starts out at full-employment equilibrium. Some events then occur that generate cost-push inflation. Which of the following events might cause cost-push inflation? A. a decrease in exports. B. an increase in the money wage rate or firms raise prices C. an increase in the quantity of money. D. a decrease in government expendit

The economy starts out at full-employment equilibrium. Some events then occur that generate cost-push inflation. Which of the following events might cause cost-push inflation? A. a decrease in exports. B. an increase in the money wage rate or firms raise prices C. an increase in the quantity of money. D. a decrease in government expendit

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 11P

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Similar questions

Which of these is not a negative effect of inflation? a. It lowers down the value of money b. It rises the level of employment c. It increases the price of goods and services d. It lowers down the purchasing power of people
Let's say the inflation rate in an economy turns out to be higher than expected. Will the following people, or bank, be affected? Helped, hurt, or unaffected? a. Someone keeping a large quantity of cash in a shoe box in their closet. b. A bank lending money at a fixed rate of interest c. A union member with a COLA wage contract d. A person who is not due to receive a pay raise for another 11 months
Which of the following statements about inflation is true? A. Inflation is not a problem because it is just another way for the government to collect revenue—an alternative to the income tax or the sales tax. B. Inflation is a tax on holding money. C. Inflation occurs when real GDP grows more rapidly than the quantity of money. D. Inflation is a tax on spending money.
In the fall of 2007, most economists felt that the a. inflation rate was above the natural rate. b. unemployment was at the natural rate. c. inflation rate was below the natural rate. d. unemployment rate was below the natural rate
Which of these words or phrases do not describe what inflation is? a.Decrease in price level b.General prices c.Over a period of time d.Sustained increase in prices
Which of these is not a factor that causes demand-pull inflation? a. Private consumption b. Population c. Government spending d. Supply side shocks
Inflation represents the rate of increase of the average price of goods. If inflation decreases from 10% to 5%, does the average price of goods decrease? Explain.
The price-wage spiral is associated with which type of inflation? a. Cost push b. Demand pull c. Built in d. Chronic
What is the impact on inflation? Explain
Demand-pull inflation Demand-pull inflation occurs when: A. input costs rise. B. unemployment is above the natural rate. C. people incorrectly forecast inflation. D. aggregate demand increases.
On the way into school you hear the following report on the radio: "inflation for the month of February was 0.4%. Over the year inflation was 2.2%." Which of the following options best explains what these figures mean? Select one: a. Inflation in February was much slower than it was in other months from the past year. b. The prices of household necessities, excluded household luxuries, increased by 2.2%, compared to 12 months ago. c. The prices of the things a typical urban consumer buys, as estimated by the Bureau of Labor Statistics, increased on average 2.2%, compared to 12 months ago. d. The government increased prices by 2.2% over the past year in order to keep pace with production costs.
Which policy measure may reduce demand-pull inflation but increase cost-push inflation? Pick a,b,c, or d A. A rise in government spending on training B. A decrease in import tariffs C. A rise in the rate on interest D. A decrease in corporation tax