Which of the Following Would Cause Both an Increase in the Price

question 116

Multiple Choice

Which of the following would cause both an increase in the price level and an increase in real output?

• A)A tax hike.
• B)A decrease in production costs.
• C)An increase in transfer payments.
• D)A decrease in government spending.

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Definitions:

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not likely to be converted to cash in the short term.

Warehouse Financing

A form of financing used by banks and other institutions to loan money to companies using inventory as collateral.

Trust Receipt

A trust receipt is a financial document issued by a bank to a buyer who has obtained a loan to purchase goods, where the buyer agrees to hold the goods in trust for the bank until the loan is repaid.

Inventory Loans

Short-term loans or lines of credit secured by a company’s inventory, used to purchase products for sale.