What Is the Crucial Difference Between Inflation Generated on the Demand

question 38

Multiple Choice

What is the crucial difference between inflation generated on the demand side versus inflation generated on the supply side?

• A)Demand-side inflation is short-lived, while supply-side inflation lasts for a long time.
• B)Demand-side inflation leads to budget surpluses, while supply-side inflation contributes to budget deficits.
• C)Supply-side inflation is subject to control of policy makers, while demand-side inflation is beyond their reach.
• D)Demand-side inflation is normally accompanied by rising real GDP, while supply-side inflation may be accompanied by falling real GDP.

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