If the Economy Is Experiencing Demand-Pull Inflation, Then the Appropriate

question 56

Multiple Choice

If the economy is experiencing demand-pull inflation, then the appropriate government policy would be to shift the:

• A)aggregate demand curve by using a tax increase coupled with spending cuts.
• B)aggregate demand curve by using a tax increase coupled with more spending.
• C)aggregate demand curve by using a tax cut coupled with spending cuts.
• D)aggregate demand curve by using a tax cut coupled with more spending.
• E)aggregate supply curve by using a tax cut coupled with spending cuts.

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Definitions:

Freight-In

The cost associated with transporting goods to a company's location, which is typically included in the inventory cost of the purchased goods.

Single-Step Format

In accounting, a method of income statement preparation where expenses are subtracted from revenues in a single step to calculate net income.

Pretax Income

The income earned by a business before tax is deducted.

Extraordinary Loss

A loss resulting from events that are both unusual and infrequent in nature, not expected to recur in the foreseeable future.