Demand pull inflation occurs when the:
A. price of a key input increases suddenly.
B. price level changes in response to changes in the business cycle.
C. price of necessity goods increases suddenly.
D. business cycle becomes sporadic and unpredictable.
B. price level changes in response to changes in the business cycle.
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The U.S. government suspended the convertibility of the dollar into gold in
A) the 1930s. B) the 1950s. C) the 1970s. D) 1991, when the first Gulf War broke out.
All of the following, except one, would increase the demand for a particular model of a Ford automobile. Assume that this model is a normal good. Which is the exception?
a. an increase in buyers' incomes b. increased prices of other Ford models c. an expected future increase in the price d. an increase in the U.S. population e. a decrease in the price of steel
As output rises, eventually the MPP of a resource will
A. rise. B. fall. C. become constant.
If the economy is experiencing an inflationary gap, an increase in the budget surplus
A. will increase the size of the inflationary gap. B. will increase aggregate demand and will increase the price level. C. will cause an increase in inflation and increase aggregate supply. D. will reduce the size of the inflationary gap.