A. An outward shift of aggregate demand- and demand-pull inflation
B. An outward shift of aggregate demand and cost push inflation
C. An outward shift of aggregate supply and demand-pull inflation
D. An outward shift of aggregate supply and cost push inflation
Inflation & Productivity
An increase in aggregate demand is more likely to lead to demand pull inflation if ?
A. Aggregate supply is perfectly elastic
B. Aggregate supply is Perfectly inelastic
C. Aggregate supply is unit elastic
D. Aggregate supply is relatively elastic
In the short run unemployment may fall below the natural rate of unemployment if ?
A. Nominal wages have risen less than inflation
B. Nominal wages have risen at the same rate as inflation
C. Nominal wages have risen more than inflation
D. Nominal wages have risen less than unemployment
If workers and firms agree on an increase in wages based on their expectations of inflation and inflation turns out to be more than they expected ?
A. none of these answers
B. Workers will gain at the expense of firms
C. neither workers nor firms will gain because the increase in wages in fixed in the labor agreement
D. firms will gain at the expense of workers.
Demand pull inflation may be caused by ?
A. An increase in costs
B. A reduction in interest rate
C. A reduction in government spending
D. An outward shift in aggregate supply
Inflation ?
A. Reduce the cost of living
B. Reduce the standard of living
C. Reduce the price of products
D. Reduce the purchasing power of a rupee
Inflation can be measured by all of the following except the ?
A. All of these answers are used to measure inflation.
B. consumer price index
C. Producer price index
D. GDP deflector
E. finished goods price index
Which of the following statements is correct ?
A. none of these answers
B. The nominal interest rate is the inflation rate minus the real interest rate
C. The real interest rate is the nominal interest rate minus the inflation rate
D. The nominal interest rate is the real interest rate minus the inflation rate.
According to the Phillips curve unemployment will return to the natural rate when ?
A. Nominal wages are equal to expected wages
B. Real wages are back at equilibrium level
C. Nominal wages are growing faster than inflation
D. Inflation is higher than the growth of nominal wages
If there is an increase in the price of apples which causes consumers to purchase fewer kilograms of apples and more kilograms of oranges, the CPI will suffer from ?
A. none of these answers
B. substitution bias
C. base year bias
D. bias due to unmeasured quality change
E. bias due to the introduction of new goods.
