__________ is a situation in which lower growth and higher prices occur together
ID: 1226673 • Letter: #
Question
__________ is a situation in which lower growth and higher prices occur together
A. inflation
B. cost-push inflation
C. recession
D. stagflation
Cost-push inflation is caused by:
A. an increase in aggregate demand
B. a decrease in aggregate demand
C. an increase in aggregate supply
D. a decrease in aggregate supply
In addition to consumption, the major components of aggregate expenditures do not include
A. investment
B. interest rate
C. government purchases
D. exports-imports
The SRAS is __________; the LRAS is __________.
A. upward sloping; upward sloping
B. upward sloping; vertical
C. vertical; upward sloping
D. vertical; vertical
_________ are unexpected temporary events that can either increase or decrease the short-run aggregate supply
A. consumption
B. supply shocks
C. Nonlabor input prices
D. net exports
If some nonprice level determinant causes consumption and investment to decrease, then the effect on aggregate demand will be a:
A. movement upward along the curve
B. movement downward along the curve
C. shift to the left
D. shift to the right
Which of the following is not a part of GDP?
A. net imports
B. consumption
C. government purchases
D. investment
A. inflation
B. cost-push inflation
C. recession
D. stagflation
Cost-push inflation is caused by:
A. an increase in aggregate demand
B. a decrease in aggregate demand
C. an increase in aggregate supply
D. a decrease in aggregate supply
Explanation / Answer
Answer )
Q.1) D. stagflation
Q.2) D. a decrease in aggregate supply
When there is a decrease in the aggregate supply of goods and services stemming from an increase in the cost of production, we have cost-push inflation.
Q.3) B. interest rate.
the aggregate expenditure is the sum of expenditures on consumption, investment, government expenses and net exports.
Q.4) B. upward sloping; vertical
The long-run aggregate supply curve Is vertical because changes in the price level have no effect on real output.SRAS is upward sloping because Firms are able to earn higher profits as long as the price level increases and the nominal wage Rate remains constant.
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