Assuming prices and output are somewhat flexible, an increase in consumer spending will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease uncertain/decrease

Assuming prices and output are somewhat flexible, an increase in consumer spending will cause inflation to in the short run and growth to _ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease uncertain/decrease

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 14SQ

See similar textbooks

Related questions

Q: Inflation expectations refer to the rate at which: Group of answer choices actual inflation exceeds…

A: Inflation refers to the rate of change in the market value of products and services over time.

Q: Which of the following best describes the effect of the zero interest rate policy implemented in…

A: Zero bound rates of interest suppositions have been overturned as of late in recent years. In…

Q: There was a fall in investment spending by business in the third quarter of 2020. What would be the…

A: ANSWER - An increase in unemployment In theory, a rise in the savings rate should lead to an…

Q: Define inflation. Explain why inflation is a macroeconomic concern. Question 2: How can the…

A: Inflation is defined as an overall increase in general price level of a basket of goods and…

Q: If policymakers accommodate an adverse supply shock, then in the short run the unemployment rate…

A: Answer to the question is as follows :

Q: Assuming prices are sticky in the short run, a decrease in useful government spending will cause…

A: Decrease in G shifts the AD curve to the left, leading to a lower real GDP and a lower price level…

Q: Which policy measure may reduce demand-pull inflation but increase cost-push inflation? Pick a,b,c,…

A: Demand-pull inflation is the growing price pressure that comes with a supply shortage, which…

Q: Distinguish between anticipated, unanticipated, and imperfectly anticipated inflation regarding its…

A: Anticipated inflation is the predicted percentage increase in the level of prices in a given economy…

Q: When a recessionary gap exists, actual output______ potential output and the rate of inflation will…

A: A recessionary gap, or contractionary gap, happens when a country's genuine GDP is lower than its…

Q: If the economy is in long-term equilibrium and cost of energy for production increases, which of the…

A: The long-term equilibrium is determined where aggregate demand is equal to both the short-run and…

Q: Suppose that people expect inflation to equal 6 percent, but in fact, prices rise by 4 percent.…

A: please find the answer below.

Q: What prediction can you make about the inflation when a country is in war? Write your answer with…

A: The aggregate demand curve shows the negative relationship between price level and real GDP where…

Q: Which of the following statements are FALSE?Select all appropriate choices. When the inflation rate…

A: In an economy, inflation rate is considered as a macroeconomic variable as it influence the economy…

Q: If the economy is in long run economic equilibrium, at potential GDP, and full employment has been…

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: Demand-pull inflation starts with a shift of the potential GDP line leftward. AS curve leftward. AS…

A: In economics, inflation is generally defined as the overall increase in the price level in the…

Q: Which statement is CORRECT? The Consumer Price Index is considered the best measure of long-run,…

A: ) Consumer price index (CPI) is defined as the average change in the prices of fixed baskets of…

Q: is inflation that results from a decrease in the aggregate supply curve while the aggregate demand…

A: Inflation refers to the general increase in the all over price in an economy.

Q: Rational expectations believe that a. the government must change government spending and taxes…

A: Human Beings make rational decisions. They weigh the pros and cons of all situations and then take a…

Q: Inflation caused by a cut in income tax is an example of a) expectations-generated inflation b)…

A: In an economy, inflation can be caused due to different market conditions such as supply-side or…

Q: In every election year, politicians sing their own praises of having stabilized prices through the…

A: Persistent rise in prices of goods and services leafs to inflation. When aggregate demand exceeds…

Q: The self-correcting tendency of the economy means that recessionary gaps are eventually eliminated…

A: Self correcting property of the economy means production will adjust itself in order to reach full…

Q: Complete the sentences with the correct term. Some options can be used more than once, and some may…

A: Inflation is the overall increase in the general price level in an economy. It, in a way, represents…

Q: Why governments / decision makers try to achieve the stable economic growth and lower inflation?…

A: When inflation rises, unemployment falls. When aggregate supply or aggregate demand increases,…

Q: Assuming prices and output are somewhat flexible, a decrease in investment will cause inflation to…

A: Inflation is the general rise in the price level in an economy over a period of time. It reduces the…

Q: A way for policymakers to avoid the problems that deflation can present and still meet their…

A: The deflationary situation indicates decreasing price level. Since the price level decreases, it…

Q: conservative" central banker cares Select one: A. less about inflation and more about…

A: When talking about Central Bank, it can be said that it is different from other banking institutions…

Q: Which of these is not a factor that causes demand-pull inflation? a. Private consumption b.…

A: Demand is the sum of the total quantity of commodities that the consumers are willing to purchase at…

Q: The economy starts out at full-employment equilibrium. Some events then occur that generate…

A: Cost push inflation can be defined as inflation which occurs due to rise in input costs like rise in…

Q: Inflation can be caused either by rapid growth rate of aggregate demand or by sluggish growth of…

A: An economy attains equilibrium when aggregate demand is equal to the aggregate supply.

Q: Which of the following would impose the greatest costs to society? high levels of expected…

A: Inflation refers to the sustained increase in the general price of goods and services in an economy…

Q: Inflation arises due to: Group of answer choices changes in real output, changes in nominal output,…

A: In an economy, inflation is an economic term to describe a rise in the market price of commodities…

Q: Nobel prize-winning economist Milton Friedman once had the following statement: "In- flation is…

A: Inflation refers to the persistent rise in the general price level. Inflation is worrisome for the…

Q: One of the fiscal measures of dealing with inflation is: a. Implement a budget surplus b. Operate a…

A: Inflation refers to the increase in the general price level. Inflation is worrisome for the economy…

Q: In which situation is a program to reduce inflation likely to have the lowest costs? if the…

A: sacrifice ratio is defined as the cumulative rise in unemployment following the disinflation,

Q: Supply-side inflation is caused by: OPTIONS: an increase in aggregate demand and no change in…

A: Inflation refers to the increase in the general price level. Inflation can be demand pull inflation…

Q: As the economy slide into the Great Depression, many banks failed and the nation’s money supply…

A: If money supply falls due to bank failures, then we can think about the money market…

Q: Syria’s economic situation is getting worse. Price levels are increasing significantly as the flow…

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: A government with debt has an incentive to create inflation to eliminate some debt. Why might it not…

A: Government can create inflation by increasing money dupply. Therefore even with debt,government…

Q: In the basic New Keynesian model, if anticipated future inflation decreases and the central bank…

Q: Unanticipated inflation Unanticipated inflation penalises: A. those earning incomes that are…

A: Unanticipated inflation can be defined as the increase in general rise in price more than the…

Q: If you are hired by an organization, you would be least hurt by inflation if Group of answer choices…

A: Here answer is "Your employer has a cost-of-living adjustment clause in the employment contract"

Q: Expectations of inflation are ____________ effective than/as actual inflation in ____________…

A: Inflation is the general increase in the overall prices in the economy.

Q: nflation targeting focuses on setting a specific level of money supply that shall result to a…

A: Answer to the question is as follows:

Q: Please draw the Philips curve with a positive relationship between aggregate output and inflation…

A: Phillips curve is a type of curve which shows opposite relationship between inflation rate and…

Question

Assuming prices and output are somewhat flexible, an increase in consumer spending will cause inflation to __________ in the short run and growth to ___________ in the short run.

		increase/decrease
		increase/increase
		decrease/increase
		decrease/decrease
		uncertain/decrease

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The AD/AS model is static. It shows a snapshot of the economy at a given point in time. Both economic growth and inflation are dynamic phenomena. Suppose economic growth is 3 per year and aggregate demand is growing at the same rate. What does the AD/AS model say the inflation rate should be?
Assuming prices are sticky in the short run, a decrease in useful government spending will cause inflation to __________ in the short run and growth to ___________ in the short run. remain unchanged/decrease increase/increase decrease/increase decrease/decrease remain unchanged/remain unchanged
Assuming prices and output are somewhat flexible, an increase in worthless government spending will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease remain unchanged/remain unchanged
Assuming prices and output are somewhat flexible, a decrease in investment will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease remain unchanged/decrease
Inflation does not affect all prices equally. This ragged inflation causes relative-price variability, and consumer decisions Question 33 options: are distorted and the ability of markets to efficiently allocate factors of production is impaired. are distorted, but markets are still able to efficiently allocate factors of production. are not distorted, but the ability of markets to efficiently allocate factors of production is impaired. are not distorted and markets are still able to efficiently allocate factors of production.
With respect to the concept of inflation, it is correct to say that ________. options: A) inflation increases the purchasing power of consumer dollars. B) inflation and deflation are really almost synonymous in practice. C) the consumer price index is one way to measure inflation. D) inflation occurs when the amount of money taken out of the economy exceeds the amount of money put into the economy. E) inflation occurs when people have more money to spend as the quantity of goods available increases.
Inflation is a negative macroeconomic phenomenon that distorts the economic behaviour of both corporations and individuals and the economy as a whole. Measures have to be taken in order to solve this issue, so as to limit the impact of inflation on everyday operations of companies and ordinary activities of individuals. Discuss the impacts/effects on you as a citizen or employee and what do you think will be the best strategy of the government to maintain price stability or to halt inflation?