The economy starts out on the curves AD, and SAS. Some events then occur that generatea cost-push inflation.What might those events have been? Describe their initial effects and explain how a cost-push inflationspiral develops.~..Which of the following events might cause a cost-push inflation?OA. a decrease in exportsOB. an increase in the money wage rate or an increase in the money prices of raw materialsC. an increase in the quantity of moneyOD. a decrease in government expenditureStarting at point A, the initial effect of a cost-push inflation is a move to pointinflation spiral proceeds, it follows the pathO A. C; B, H, G, IO B. B; E, G, IO C. C; E, H, IO D. E; IAs a cost-push230190-150-110470-Price level (GDP deflator, 2007 = 100)LAS30+13DGB+EAHCSAS2 SAS₁FADO151719Real GDP (billions of 2007 dollars)SASOAD₂AD₁21QQ

Cost-push inflation is a type of inflation that occurs when the cost of production rises, leading…

The economy starts out on the curves AD and SAS. Some events then occur that generate a cost-push inflation. What might those events have been? Describe their initial effects and explain how a cost-push inflation spiral develops. Which of the following events might cause a cost-push inflation? OA. a decrease in exports OB. an increase in the money wage rate or an increase in the money prices of raw materials O C. an increase in the quantity of money O D. a decrease in government expenditure Starting at point A, the initial effect of a cost-push inflation is a move to point inflation spiral proceeds, it follows the path_ OA. C; B, H, G, I O B. B; E, G, I OC. C; E, H, I OD. E; I As a cost-push 230- 190- 150- 110 70- Price level (GDP deflator, 2007 = 100) LAS 30+ 13 D G B E A H C SAS SAS₁ F ADO 15 17 19 Real GDP (billions of 2007 dollars) SAS AD₂ AD₁ 21 Q Q

The economy starts out on the curves AD and SAS. Some events then occur that generate a cost-push inflation. What might those events have been? Describe their initial effects and explain how a cost-push inflation spiral develops. Which of the following events might cause a cost-push inflation? OA. a decrease in exports OB. an increase in the money wage rate or an increase in the money prices of raw materials O C. an increase in the quantity of money O D. a decrease in government expenditure Starting at point A, the initial effect of a cost-push inflation is a move to point inflation spiral proceeds, it follows the path_ OA. C; B, H, G, I O B. B; E, G, I OC. C; E, H, I OD. E; I As a cost-push 230- 190- 150- 110 70- Price level (GDP deflator, 2007 = 100) LAS 30+ 13 D G B E A H C SAS SAS₁ F ADO 15 17 19 Real GDP (billions of 2007 dollars) SAS AD₂ AD₁ 21 Q Q

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose workers negotiate for a 5 percent nominal wage increase and expect a 1 percent inflation rate. If the actual inflation rate is 6 percent, then workers A. and firms are both worse off. O B. are better off and firms are worse off. O C. are worse off and firms are better off. D. and firms are both better off. Click to select your answer.
Goverment should focus on a- long run growth and controling defalation b- lon run growth and controllin inflation c- short run groth and controllin deflation d short run growth and controlling inflation
Because the minimum wage is not indexed to inflation, when there is inflation thenominal minimum wage. and the real minimum wage. A. remains constant; remains constant B. None of the above OC. increases; decreases D. remains constant; decreases OE. decreases; remains constant
QUESTION 2 The interaction of demand-pull and cost-push inflation will result: O a. in permanently lower output and prices O b. in permanently higher output and prices Oc. in the same output and lower prices Od. in the same output and higher prices
15
Which of the following shifts in aggregate demand and short-run aggregate supply would cause an unambiguous increase in inflation? Select one: O a. A decrease in AD and an increase in SRAS O b. No change in AD and an increase in SRAS O c. An increase in AD and an increase in SRAS d. An increase in AD and a decrease in SRAS O e. A decrease in AD and a decrease in SRAS
Q44
QUESTION 34 If Mexico lowers its inflation target from 3 percent to 2 percent, the initial response to this will be OA that the AD will shift right. B. None of these answers is correct. OC.che MP curve will shift down. OD.that the AD will shift left. OE. that the AS will shift left. 12
QUESTION 20 Table: The table below is for an imaginary economy of Orangeland where a typical consumer basket consists of 2 blankets and 10 coffees. Price of a Price of a Year Blanket Coffee 2017 $40 $3 2018 $45 $4 2019 $50 $5 Refer to Table. If the base year is 2018, then the economy's inflation rate in 2019 was O a. 15.38 percent. O b. 13.98 percent. Oc. 25.00 percent. O d. 20.00 percent.
The graph refers to a large increase in gasoline prices. Price Level P₂ P1 Which of the following is likely to result? O a rise in inflation Y2 Y1 O long run economic gains O short run economic gains O natural rate of unemployment remains constant AS AS AD Real National Income
Which of the following is a positive statement? a. When the unemployment rate in an economy is 7 percent, the unemployment rate of the urban population is often close to 40 percent. Ob. Unemployment and inflation are equally important problems. C. An inflation rate of 7 percent is too high. d. Unemployment is a less important problem than inflation. e. An unemployment rate of 7 percent or higher is a national disgrace. 000