Supply Shocks Can Cause Inflation

question 44

True/False

Supply shocks can cause inflation.

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Definitions:

Regressive

Refers to policies or measures that disproportionately affect those with lower incomes, often making them bear a larger relative burden.

Proportional

A relationship between two quantities where the ratio remains constant.

Payroll Taxes

Charges assessed on employers and their workers, based on a percentage of the compensation paid to employees.

Worker

An individual who performs services or labor, usually in exchange for compensation, within an economy.