Demand-side inflation occurs when
A. increases in aggregate demand are not matched by increases in aggregate supply.
B. aggregate demand falls more rapidly than aggregate supply.
C. increases in aggregate supply outstrip increases in aggregate demand.
D. long-run aggregate demand rises faster than short-run aggregate supply.
Answer: A
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If ABC Inc and XYZ Inc have returns that are perfectly positively correlated:
A. adding ABC Inc to a portfolio that includes only XYZ Inc will increase risk. B. adding XYZ Inc. to a portfolio that consists of only ABC Inc. will neither increase nor decrease the risk of the portfolio. C. adding XYZ Inc to a portfolio that consists of only ABC Inc will neither increase nor decrease idiosyncratic risk but will lower systematic risk. D. adding XYZ Inc to a portfolio that consists of only ABC Inc will reduce risk.
According to monetarists, which of the following would be most important for the control of inflation?
A. a steady increase in federal expenditures B. the imposition of price controls C. keeping the growth rate of the money supply low and steady D. a steady increase in the size of the budget deficit
If at the MC = MR output, AVC exceeds price:
A. new firms will enter this industry. B. the firm should produce the MC = MR output and realize an economic profit. C. some firms should shut down in the short run. D. the firm should expand its plant.
The age-earning cycle usually begins
A) at relatively high income levels. B) at relatively low income levels. C) once a worker reaches 25 years of age. D) only when a worker is employed full time.