Temporary changes in the price level caused by changes in the business cycle are called:
A. demand push inflation.
B. cost push inflation.
C. demand pull inflation.
D. cost pull inflation.
Answer: C
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Avital and Joshua each have their own business selling lemonade in front of their houses. When they each charge 25 cents per glass, their total revenues are equal. However, when they each charge 40 cents per glass, Avital's revenues are bigger than Joshua's revenues. This is because:
A. Joshua faces a more inelastic demand curve. B. Avital faces a more elastic demand curve. C. Joshua faces a more elastic demand curve. D. Avital faces a less inelastic demand curve.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.
Monopolistically competitive firms use advertising exclusively to inform customers about the real differences between their products and their competitors' products.
Answer the following statement true (T) or false (F)
National income accounting helps economists and policymakers ________.
A. determine which firms are likely to succeed or fail B. measure what is occurring in each specific labor market C. follow the long-run course of the economy to assess whether it has grown or stagnated D. It helps accomplish all of these