Question : 41) A demand-pull inflation initially characterized by A) increasing real output : 1227900

 

 

41) A demand-pull inflation initially is characterized by

A) increasing real output and a labor shortage.

B) increasing real output and a labor surplus.

C) decreasing real output and a labor shortage.

D) decreasing real output and a labor surplus.

E) no change in real output and a labor shortage.

42) If demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the

A) AS curve shifts rightward.

B) potential GDP line shifts rightward.

C) AS curve shifts leftward.

D) potential GDP line shifts leftward.

E) None of the above are correct because demand-pull inflation shifts only the aggregate demand curve.

 

43) Compared to the initial equilibrium, an initial increase in aggregate demand that is NOT followed by an increase in the quantity of money results in new long-run equilibrium with

A) a higher price level but the same real GDP.

B) a higher price level and an increased level of real GDP.

C) the same price level and a lower level of real GDP.

D) the same price level and the same real GDP.

E) None of the above answers are correct.

 

44) A demand-pull inflation consists of ________ shifts in the AD curve and ________ shifts in the AS curve.

A) rightward; rightward

B) rightward; leftward

C) right; no

D) leftward; rightward

E) leftward; leftward

45) In a persisting demand-pull inflation

A) aggregate supply decreases and aggregate demand increases.

B) aggregate demand decreases and aggregate supply decreases.

C) aggregate demand increases and potential GDP decreases.

D) aggregate supply increases and aggregate demand increases.

E) None of the above answers are correct.

 

46) Demand-pull inflation results from continually increasing the quantity of money, which leads to a continually

A) decreasing potential GDP.

B) increasing potential GDP.

C) increasing aggregate supply.

D) decreasing aggregate demand.

E) increasing aggregate demand.

 

47) Demand-pull inflation persists because of

A) continuing increases in government expenditures.

B) continuing increases in the quantity of money.

C) continuing increases in the real wage rate.

D) continuing decreases in the money wage rate.

E) continuing increases in aggregate supply.

 

48) For a demand-pull inflation to persist requires persistent increases in

A) tax rates.

B) the real wage rate.

C) real GDP.

D) the quantity of money.

E) government expenditures.

49) During a demand-pull inflation, if the Fed tries to maintain a level of real GDP above potential GDP, the AD curve will ________ and the AS curve will ________.

A) shift rightward once; shift rightward continuously

B) shift rightward continuously; shift rightward continuously

C) shift rightward continuously; not shift

D) not shift; shift rightward continuously

E) shift rightward continuously; shift leftward continuously

 

50) In a demand-pull inflation, money wage rates rise because

A) a decrease in aggregate demand creates a labor shortage.

B) an increase in aggregate demand creates a labor surplus.

C) an increase in aggregate demand creates a labor shortage.

D) a decrease in aggregate demand creates a labor surplus.

E) an increase in aggregate supply creates a labor shortage.

 

 

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