A Cost-Push Inflation Spiral Results If the Fed's Response to Stagflation

question 401

Multiple Choice

A cost-push inflation spiral results if the Fed's response to stagflation is to keep

• A) decreasing aggregate demand.
• B) decreasing aggregate supply.
• C) increasing aggregate demand.
• D) increasing aggregate supply.

---

Definitions:

Parasympathetic

refers to the part of the autonomic nervous system that conserves energy as it slows the heart rate, increases intestinal and gland activity, and relaxes sphincter muscles in the gastrointestinal tract.

Skeletal

Pertains to the skeleton or bony framework of the body, which supports and gives shape to the body.

Autonomic Nervous System

A division of the peripheral nervous system that regulates involuntary functions such as heart rate, digestion, and respiratory rate.

Somatic Nervous System

Part of the peripheral nervous system that handles voluntary control of body movements through the control of skeletal muscles.