In the Long Run, Inflation Can Develop Due to

question 32

Multiple Choice

In the long run, inflation can develop due to

• A) large oil price shocks.
• B) increases in the money supply.
• C) expansionary fiscal policy.
• D) a and b.
• E) all of the above.

---

Definitions:

Treasury Bills

Short-term government securities with maturities of one year or less, sold at a discount from their face value.

Warehouse Receipts

Documents that provide proof of ownership of commodities that are stored in a warehouse for protection and future sale.

Cross-Hedging

A strategy used to manage risk by hedging a position in one asset with a position in another asset that has a similar price movement but is not identical.

Bauxite

The primary ore of aluminum, consisting primarily of aluminum oxide minerals, clay minerals, and insoluble materials.