At the Start of a Cost- Push Inflation

question 394

Multiple Choice

At the start of a cost- push inflation,

• A) the price level rises and real GDP does not change.
• B) the price level and real GDP both increase.
• C) only real GDP changes while the price level remains constant.
• D) the price level rises and real GDP decreases.

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Definitions:

Scarce Means

The limited resources available to meet unlimited wants and needs in an economy, necessitating choices and priorities.

Production

The process of creating goods and services.

Human Wants

The desires and needs of individuals or society that drive demand for products, services, and resources.

Opportunity Cost

The forgone benefit that would have been derived by an option not chosen.