At Full Employment an Increase in the Quantity of Money

question 55

Multiple Choice

At full employment an increase in the quantity of money (ceteris paribus) can create a

• A)demand-pull inflation, as can an increase in government expenditure.
• B)demand-pull inflation, but an increase in government expenditure cannot.
• C)cost-push inflation, as can an increase in government expenditure.
• D)cost-push inflation, but an increase in government expenditure cannot.
• E)demand-pull and a cost-push inflation, as can an increase in government expenditure.

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Definitions:

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