The Complexity in Recognizing the Type of Inflation

question 153

Multiple Choice

The complexity in recognizing the type of inflation:

• A)arises because demand-pull inflation always follows the cost-push inflation.
• B)arises because sometimes the original source of inflation is unknown.
• C)arises because cost-push inflation always follows the demand-pull inflation.
• D)arises because demand-pull inflation is self-limiting while cost-push inflation will continue as long as there is excess spending.

---

Definitions:

Foreign-Currency Exchange

The conversion of one currency into another currency, a critical process for international trade, travel, and investment.

Canadian Company

A business entity that is registered, operates, or was founded in Canada.

Real Exchange Rate

The price of a country's goods and services compared to those of another country, adjusted for inflation.

Trade Restriction

Measures implemented by governments to control the amount of trade across their borders including tariffs, quotas, and bans.