Which of the Following Is Least Likely to Lead to Inflationary

question 23

Multiple Choice

Which of the following is least likely to lead to inflationary monetary policy?

• A) Rising unemployment
• B) Expanding federal budget deficits
• C) Declining oil prices
• D) Conflict in the Middle East

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Definitions:

Factors of Production

The inputs used in the production of goods or services in the process of creating economic value; these typically include land, labor, capital, and entrepreneurship.

Monopsony Firm

A market situation where there is only one buyer or a dominant buyer for a product or service, giving that buyer substantial control over market prices and terms.

Competitive Firm

A business that operates in a market with many buyers and sellers, where no single entity can significantly influence the market price of goods and services.

Marginal Product

The additional output that results from using one more unit of a particular input, holding all other inputs constant.