According to the demand-pull theory, what is responsible for inflation?

(A) Demand for goods and services exceeds existing supply.
(B) Too much money is in circulation.
(C) Producers raise prices to meet increased costs.
(D) The economy is in a wage-price spiral.


Answer: Demand for goods and services exceeds existing supply.

Economics

You might also like to view...

The Smoot-Hawley Tariff Act of 1930, like any tariff act, increased the price of the taxed imported goods as well as the domestic price of U.S. goods and services produced in the industries favored by the tariff

Consequently, any tariff negatively impacts U.S. consumers by forcing them to pay higher prices. Indicate whether the statement is true or false

Economics

In the long run, there is a no tradeoff between inflation and unemployment

a. True b. False

Economics

________ occurs when people smoke more after buying life insurance.

A. Adverse selection B. Cournot and Bertrand competition C. Asymmetric information D. Moral hazard

Economics

The duopoly price provides a greater incentive to maintain cartel pricing than does the grim- trigger strategy.

Answer the following statement true (T) or false (F)

Economics