In the Long Run, Sustained Inflation Is Due to

question 20

Multiple Choice

In the long run, sustained inflation is due to

• A) a one-time increase in money growth.
• B) a continuous increase in the money growth rate.
• C) a continuous increase in aggregate demand.
• D) the rising price of oil.

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Definitions:

Profit Margin

The ratio of net income earned to total revenue received by a business, indicating the efficiency of converting sales into profit.

Investment Turnover

A ratio measuring the efficiency of a company's use of its assets in generating sales revenue; calculated as sales divided by invested assets.

Transfer Price

The price at which goods and services are sold between divisions or branches within the same company.

Variable Cost

Variable Cost refers to expenses that change in proportion to the business activity level or volume of production.