Which of the following is a correct statement?
A. Demand-pull inflation is usually accompanied by higher unemployment rates.
B. A supply shock will cause a variation of demand-pull inflation that can lead to hyperinflation.
C. It is relatively easy to distinguish between cost-push and demand-pull inflation even if you don't know the source of the inflation.
D. Demand-pull inflation will continue so long as there is excess total spending in the economy.
Answer: D
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The income elasticity of demand _____
a. must be negative because of the law of diminishing marginal utility b. could be positive, negative or zero, depending on the nature of the good c. must be positive for all goods because consumers tend to buy more at higher incomes d. is usually zero because "you can only have so much" e. can never be zero
An overvalued dollar makes U.S
A) imports rise in price. B) exports rise in price. C) monetary policy expansionary. D) fiscal policy contractionary.
If incomes fall, then
A. the budget constraint shifts inward. B. there is no change in the budget constraint. C. there is no relationship between the budget constraint and income. D. the budget constraint shifts out.
An increase in the cost of an input will result in
A) a leftward shift in the firm's supply curve. B) an upward shift of the firm's marginal cost curve. C) a leftward shift of the market supply curve. D) All of the above.