In the Short Run, Demand-Pull Inflation Increases

question 181

Multiple Choice

In the short run, demand-pull inflation increases

• A) real wages, but in the long run only nominal wages.
• B) nominal wages, but in the long run only real wages.
• C) real output and the price level, but in the long run only real output.
• D) real output and the price level, but in the long run only the price level.

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Definitions:

Competitive Spectrum

The range of competition in a market, varying from monopolies to perfect competition.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in the market, often to maximize their own profits at the expense of consumers.

Oligopolists

Firms or entities that are part of a market structure where a small number of companies or sellers dominate the supply of a particular product or service.

Prices

The amount of money or goods asked or given in exchange for goods or services.