Inflation Is Likely to Result From

question 2

Multiple Choice

Inflation is likely to result from:

• A)lower demand by consumers.
• B)increased production by business.
• C)lower interest rates.
• D)increased demand by consumers without increased supply.
• E)an increase in the supply of a product.

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Definitions:

Variable Cost

Expenses that change in proportion to the activity or production level of a business; for example, costs for raw materials that increase as more goods are produced.

Rent

A payment made periodically by a tenant to a landlord in exchange for the use of land, a building, or another property.

Fixed Costs

Costs that do not change with the level of output in the short term, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production, such as materials and labor.