ECON MACRO
ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 7, Problem 3.6P
To determine

Sources of inflation using aggregate demand and aggregate supply.

Introduction:

Aggregate demand is the total consumption (spending) of (on) the goods and services in the economy.

Aggregate supply is the total quantity of the goods and services produced in the economy.

Inflation refers to the percentage increase in the prices of the goods and services in the economy over the period of time.

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7. Prices and wages are considered ‘sticky’ if:   they do not fully adjust to changes in demand and supply. their rates of increases and decrease are identical. as prices increase, wages increase by the same percentage. their rates of change are directly connected to rate of change in unemployment.
15.______________Demand-pull inflation: FILL IN THE BLANK A) occurs when total spending in the economy is excessive. B) is measured differently than cost-push inflation. C) can be present even during an economic depression. D) is also called "hyperinflation. E) is also called deflation"
3- A country is said to be experiencing inflation when A- the goods-market is rising over time B- prices of all goods and services are rising over time C- Total output is falling over time D- prices of all goods and services are falling over time
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