With Demand-Pull Inflation in the Extended AD-AS Model, There Is

question 14

Multiple Choice

With demand-pull inflation in the extended AD-AS model, there is

• A)a decrease in aggregate demand and a decrease in unemployment that eventually increases nominal wages.
• B)an increase in aggregate demand and a decrease in unemployment that eventually decreases nominal wages.
• C)an increase in aggregate demand and an increase in unemployment that eventually decreases nominal wages.
• D)an increase in aggregate demand and a decrease in unemployment that eventually increases nominal wages.

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Definitions:

Interest on Construction Loan

The interest that accrues on a loan taken out to finance the construction of a building or other project, traditionally capitalized and added to the project's cost base.

Expense Account

A type of account used in accounting to track money spent or costs incurred by a business in its operational activities.

Straight-Line Method

A method of calculating the depreciation of an asset, which evenly spreads the cost of the asset over its useful life.

Residual Value

The estimated salvage value of an asset at the end of its useful life.