Which of the Following Would Be Expected to Cause a an Increase

question 57

Multiple Choice

Which of the following would be expected to cause a an increase in the inflation rate rather than a once-and-for-all increase in the price level?

• A)the imposition of a new sales tax
• B)the sudden doubling of a key raw materials price
• C)a new payroll tax that raises unit wage costs
• D)expectations of higher future inflation
• E)an early frost that damages the agricultural harvest

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Definitions:

Compounded Monthly

A method where interest earned is added to the principal amount on a monthly basis, and future interest is calculated on the new total.

Life of the Loan

The duration over which a loan is scheduled to be repaid.

Total Interest

The cumulative amount of interest paid on a loan over its entire term, encompassing all interest charges over the life of the loan.

Annual Payments

Regular payments made once a year, often associated with loans, annuities, or investment returns.