Which of the following can cause inflation?
A. increases in long-run aggregate supply
B. decreases in short-run aggregate supply
C. increases in short-run aggregate supply
D. decreases in aggregate demand
Answer: B
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Suppose that business firms spend $500 million on new capital equipment this year. Of this $500 million, $300 million was spent on domestically produced capital and $200 million was spent on foreign-produced capital
All else equal, these transactions contribute ________ to GDP. A) $500 million B) $300 million C) $800 million D) $200 million E) $0
What determines the supply of a nonrenewable natural resource?
What will be an ideal response?
The most heavily traded category of goods in the world is:
a. office and telecom equipment. b. chemicals. c. iron and steel. d. textiles. e. crude petroleum.
Given the following formula for the Taylor rule:Target federal funds rate = natural rate of interest + current inflation + 1/2(inflation gap) +1/2(output gap) if the current rate of inflation is 4%, natural rate of interest is 2%, and the target rate of inflation is 2%, and output is 3% above its potential, the target federal funds rate would be:
A. 4.5%. B. 7%. C. 8.5%. D. 5%.