Which of the following would cause an increase in the price level (i.e., a short
ID: 1225709 • Letter: W
Question
Which of the following would cause an increase in the price level (i.e., a short-run inflation)?
A.
A reduction in personal income taxes that reduces aggregate demand.
B.
An increase in governmennt purchases
that
increases aggregate demand
.
C.
An increase in the exchange rate of the dollar in relation to foreign currencies that decreases short-run aggregate supply.
D.
An increase in government purchases that decreases short-run aggregate supply.
Which of the following scenarios would lead to an increase in the price level (i.e., a short-run inflation)?
A.
An increase in oil prices that leads to a reduction in aggregate demand.
B.
An increase in payroll taxes leading to an increase in aggregate demand.
C.
An increase in business pessimism regarding future profitability that decreases short-run aggregate supply.
D.
An increase in business optimism regarding future profitability
that
increases aggregate demand
.
Explanation / Answer
Answer ) Q1. D.
An increase in government purchases that decreases short-run aggregate supply.
Q2. D.
An increase in business optimism regarding future profitability that increases aggregate demand
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.