An Increase in Inflationary Expectations That Causes an Increase in the Growth

question 96

Multiple Choice

An increase in inflationary expectations that causes an increase in the growth rate of firms' prices shifts the:

• A) aggregate demand curve to the right.
• B) aggregate supply curve to the left.
• C) aggregate demand curve to the left.
• D) aggregate supply curve to the right.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Acid-Test Ratio

A stringent indicator of whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory.

Current Ratio

A financial metric assessing a firm's capacity to settle short-term debts using its existing assets.