An Increase in Inflation Is Likely to Occur When Government

question 105

Multiple Choice

An increase in inflation is likely to occur when government:

• A)counters cost-push inflation with a stimulative fiscal policy or monetary policy.
• B)adopts a hands-off approach to cost-push inflation.
• C)increases aggregate supply by lowering nominal wages.
• D)increases aggregate demand by raising nominal wages.

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Definitions:

External

Refers to factors, influences, or stimuli that originate outside of an individual.

Locus of Control

Refers to an individual's belief system regarding the causes of his or her experiences, and the factors to which that person attributes success or failure.

Native Americans

The indigenous peoples of the United States, including both Native American tribes and Alaska Natives.

External Factors

Elements outside an individual that can influence their behavior, decisions, and well-being, such as the environment, social interactions, and cultural norms.