Inflationary Pressures That Result from a Rightward Shift in the AD

question 7

Multiple Choice

Inflationary pressures that result from a rightward shift in the AD curve

• A)cause Y to fall below Y*.
• B)will worsen any existing unemployment problem.
• C)will initiate a wage-price spiral.
• D)will eventually subside unless accompanied by continual increases in the money supply.
• E)will permanently increase output.

---

Definitions:

Policy Decisions

Decisions made by an organization's leadership or governing body that set its policies, determining strategic direction and actions.

Marketable Securities

Financial instruments and assets that can easily be converted into cash quickly, with high liquidity and short maturities.

Spontaneous Financing

Financing that arises naturally during the course of business operations, such as trade credit, without the need for formal negotiation or arrangements.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business.