Whenever the general level of prices rises because of continual increases in aggregate demand, we say that the economy is experiencing
A. cost push inflation.
B. aggregate supply shock.
C. supply-side inflation.
D. demand-side inflation.
Answer: D
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A perfectly competitive firm's horizontal demand curve implies that the firm does not have to lower its price to sell more output
Indicate whether the statement is true or false
A firm that shuts down in the short run experiences losses equal to its
A) total fixed costs. B) average variable costs. C) total variable costs. D) total variable costs minus its total fixed costs.
The demand for money curve shows that there is an inverse relationship between the quantity of money demanded and the:
a. quantity of money supplied. b. gross domestic product (GDP). c. price level. d. interest rate.
Policy lags are typically much shorter for monetary policy than for fiscal policy
a. True b. False Indicate whether the statement is true or false