Demand-pull inflation is associated with a(n):
a. decrease in the aggregate supply curve.
b. increase in the aggregate supply curve.
c. increase in the aggregate demand curve.
d. decrease in the aggregate demand curve.
e. decline in the availability of a productive resource
c
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An upward shift in the Fed's policy reaction function is a ________ of monetary policy, and the aggregate demand curve ________.
A. tightening; shifts left B. easing; shifts left C. tightening; shifts right D. easing; shifts right
The degree to which the public believes the central bank's announcements about future policy is its
A) reputation. B) transparency. C) openness. D) credibility.
The cost of a higher living standard in the future is giving up
A. current consumption. B. current investment. C. future consumption. D. future investment.
Related to the Economics in Practice on page 318: A company selling iced tea discovers that as sugar is added to tea, customers' opinions of the taste of the tea rises for the first few grams of sugar and then drops. Even so, the company chooses not to add the amount sugar that would result in the best-tasting tea. Which of the following would explain why adding less sugar could be a wise decision?
A. Many products in the cold drink market are sold with substitutes for sugar, such as high fructose corn syrup. B. Manufacturers of tea are required to clearly indicate the amount of sugar in their products. C. The price of sugar added to tea is much less significant than the price of other ingredients, such as tea leaves. D. Teas with less sugar are more likely to appeal to health-conscious consumers.