In the Long Run, Demand-Pull Inflation Leads to

question 32

Multiple Choice

In the long run, demand-pull inflation leads to

• A) higher unemployment and a higher price level.
• B) lower real wages and higher unemployment.
• C) lower real output and no change in unemployment.
• D) a higher price level and no change in real output.

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Definitions:

Competition

The economic rivalry between companies or individuals for a larger share of a market, leading to better quality products and services at lower prices.

Competition

The rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix.

Independently Acting Buyers

are consumers who make purchasing decisions based on their own preferences and circumstances, without coordinating with others.

Freedom to Enter

The condition in a market where new firms can enter the industry without facing prohibitive barriers or regulations.