If an Increase in Investment Causes an Increase in Real

question 61

Multiple Choice

If an increase in investment causes an increase in real output beyond the full-employment level,the result will be

• A)Demand-pull inflation.
• B)An increase in the recessionary GDP gap.
• C)Cost-push inflation.
• D)An increase in undesired inventories.

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Definitions:

Agent

Individual employed by a principal to achieve the principal’s objective.

Principal

Individual who employs one or more agents to achieve an objective.

Plant Managers

Individuals responsible for overseeing the daily operations of manufacturing plants and facilities, ensuring efficient production processes.

Multi-Plant Firms

Multi-plant firms are companies that operate more than one manufacturing or production facility, often to meet large-scale demand or diversify production locations for strategic advantages.