In a Demand-Pull Inflation, If the Fed Stops Expanding the Quantity

question 1

Multiple Choice

In a demand-pull inflation, if the Fed stops expanding the quantity of money,

• A)a cost-push inflation will occur.
• B)the demand-pull inflation ends.
• C)a deflation will occur.
• D)government expenditure will cause the demand-pull inflation to continue.
• E)None of the above answers is correct.

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Definitions:

Non-directional

A hypothesis that does not predict the direction of the difference or relationship between the variables being studied.

≠ Symbol

The symbol ≠ denotes 'not equal to' in mathematical equations, indicating the inequality between two values.

≠ Symbol

A mathematical symbol representing inequality, indicating that two values are not equal.

Alternative Hypothesis

A hypothesis that contradicts the null hypothesis, suggesting a new effect or relationship.