With Mild Demand-Pull Inflation, the Economy's Output Level Would Tend

question 4

Multiple Choice

With mild demand-pull inflation, the economy's output level would tend to be

• A)pulled up by the increase in total spending.
• B)pulled down by the decrease in total spending.
• C)pulled up by the rising unemployment.
• D)pulled down by the rising unemployment.

---

Definitions:

Tax Incidence

The analysis of the effect of a particular tax on the distribution of economic welfare among stakeholders.

Elastic Demand

Elastic demand refers to a situation where the quantity demanded of a product or service significantly changes in response to changes in its price.

Excise Tax

A specific type of tax imposed on certain goods, services, or activities, often aimed at discouraging their use or raising revenue from specific sources.

Government Revenue

The total money received by a government from taxes and non-tax sources to finance government operations and services.