Refer to the above figure. If the aggregate demand curve shifts beyond AD5, then the economy will experience
A. stagflation.
B. cost-push inflation.
C. structural inflation.
D. demand-pull inflation.
Answer: D
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Constant returns to scale means that as all inputs are increased
A) total output remains constant. B) average total cost rises. C) average total cost rises at the same rate as do the inputs. D) total output increases in the same proportion as do the inputs.
During the postbellum period of U.S. history,
(a) the U.S. balance of payments experienced a deficit throughout the entire period. (b) manufacturing exports became the top foreign exchange earner. (c) cotton exports continued to be the top foreign exchange earner. (d) the U.S. never borrowed from foreigners.
The combination of low income elasticity of demand for food and high agricultural productivity leads to the demand for food increasing and the supply of food increasing even more, which has lead to rising prices of food
Indicate whether the statement is true or false
The functioning of a market economy is very dependent upon investment for provision of capital and future growth. Describe the process of investment and employment of the created capital in production.
What will be an ideal response?