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:

Cash Payments

Outflows of cash from a company to settle debts, purchase goods or services, or make investments.

Cash Account

An account recording the amounts of cash received and paid out in transactions.

Credit

A financial term denoting the provision of money, goods, or services with the expectation of future payment.

Consuming Goods

The action of using up goods or products, thereby reducing inventory.