MACROECONOMICS (LL)
21st Edition
ISBN: 9781260186949
Author: McConnell
Publisher: MCG
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Question
Chapter 11.7, Problem 2QQ
To determine
Inflationary expenditure gap.
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Which of these is not a factor that causes demand-pull inflation?
a.
Private consumption
b.
Population
c.
Government spending
d.
Supply side shocks
Explain three implications of increasing inflation.
Distinguish between demand-pull inflation and cost-push inflation. Which of the two types is most likely to be associated with a negative GDP gap? Which with a positive GDP gap and when the price is $1500.
Chapter 11 Solutions
MACROECONOMICS (LL)
Ch. 11.2 - Prob. 1QQCh. 11.2 - Prob. 2QQCh. 11.2 - Prob. 3QQCh. 11.2 - Prob. 4QQCh. 11.7 - Prob. 1QQCh. 11.7 - Prob. 2QQCh. 11.7 - Prob. 3QQCh. 11.7 - Prob. 4QQCh. 11 - Prob. 1DQCh. 11 - Prob. 2DQ
Ch. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Prob. 3PCh. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10P
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Similar questions
- One of the fiscal measures of dealing with inflation is: a. Implement a budget surplus b. Operate a budget deficit c. Increase the rate of interest d. Operate a balance budgetarrow_forwardWhich policy measure may reduce demand-pull inflation but increase cost-push inflation? Pick a,b,c, or d A. A rise in government spending on training B. A decrease in import tariffs C. A rise in the rate on interest D. A decrease in corporation taxarrow_forwardWhich of the following is the positive impact of inflation? A) Inflation causes the real value of saving for a saving person to eroded. B) Inflation makes debtors pay less in real return. C) Fixed-income people have the same income but a high cost of living. D) lender will not have the option to earn interest.arrow_forward
- compare between demand pull and cost push inflationarrow_forwardDemand-pull inflation Demand-pull inflation occurs when: A. input costs rise. B. unemployment is above the natural rate. C. people incorrectly forecast inflation. D. aggregate demand increases.arrow_forwardA significant rise in the price of oil causes: Question 3 options: a) demand-pull inflation b) deflation c) disinflation d) cost push inflationarrow_forward
- A consequence of unanticipated inflation in an economy is that:Group of answer choices the rate of economic growth reaches a maximum. the risks of investing in a business increase. the level of productive activities in the economy increases. the allocation of resources in the economy becomes efficient.arrow_forwardOngoing inflation does not automatically reducemost people’s incomes becausea. the tax code is fully indexed for inflation.b. people respond to inflation by holding less money.c. wage inflation goes together with price inflation.d. higher inflation lowers real interest rates.arrow_forwardGovernments critically analyze the impact of increasing minimum wages. Increasing wages is a risky decision for an economy because this might cause ___________. a. Cost push b. Hyperinflation c. to bring low cost of production d. Built in inflationarrow_forward
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