In a Demand-Pull Inflation, If the Fed Stops Expanding the Quantity

question 54

Multiple Choice

In a demand-pull inflation, if the Fed stops expanding the quantity of money

• A) a cost-push inflation spiral will occur.
• B) government expenditure will cause the demand-pull inflation to continue.
• C) a deflation will occur.
• D) the demand-pull inflation spiral ends.

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Definitions:

Arbitration

A method of dispute resolution where a neutral third party, called an arbitrator, makes a binding decision to settle a dispute.

Judicial Review

The process by which a court examines the actions of public sector bodies to ensure they are lawful and constitutional.

Appeal

The process of challenging a decision in a higher court or authority in hopes of overturning or modifying the original decision.

Successful Negotiation

The process of reaching an agreement between two or more parties through effective communication and compromise.