Graphically, demand-pull inflation is shown as a ________.
A. rightward shift of the AD curve along an upsloping AS curve
B. leftward shift of the AS curve along an upsloping AD curve
C. leftward shift of the AS curve along a downward-sloping AD curve
D. rightward shift of the AD curve along a downward-sloping AS curve
Answer: A
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The law of demand asserts that: a. output prices are more important than input prices
b. when people want a good badly enough they will find a way to pay for it. c. people want to buy more of goods that are priced very high because of their prestige. d. the quantity of a good that people will buy is inversely related to the product's price.
One reason why the Phillips curve “broke down” is
A. most of the inflation of the 1970s was from the demand side. B. most of the inflation of the 1970s was from the supply side. C. the inflation of the 1970s was foreseen, unlike the inflation of the 1980s. D. the inflation of the 1970s was purely random and could not be explained with economic theory.
The line described by the consumption function C = a + bYD will change its slope when
A. Autonomous consumption changes. B. The APS changes. C. Disposable income changes. D. The MPC changes.
A country is likely to be better off in the long run if it pursues self-sufficiency
Indicate whether the statement is true or false