Continued Inflation Is Caused by Continued Increases in Aggregate Demand

question 134

True/False

Continued inflation is caused by continued increases in aggregate demand resulting from continued increases in the money supply.

---

Definitions:

Average Product

The output per unit of input, calculated by dividing total production by the total quantity of input.

Labor

The work performed by humans that is used in the production of goods and services.

Diminishing Marginal Returns

An economic principle stating that as one factor of production increases while others remain constant, the incremental gains in output will eventually decrease.

Input

Resources such as labor, materials, and capital used in the production of goods and services.