Which of the Following Is True with Respect to Inflation

question 53

Multiple Choice

Which of the following is true with respect to inflation targeting?

• A)Inflation targeting would allow the Fed more control over inflation caused by excessive aggregate demand.
• B)Inflation targeting would require the Fed to maintain very strong economic growth.
• C)Inflation targeting could control the inflation caused by higher oil prices.
• D)Inflation targeting would allow the Fed to have more control over the unemployment rate.

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Definitions:

Contribution Margin

The amount by which sales income exceeds variable expenses, which is utilized to pay off fixed expenses and create profit.

Variable Costs

Expenses that vary in direct proportion to changes in production or sales volume, such as raw materials and direct labor costs.

Sales

Revenue generated from goods or services exchanged by an entity during its normal business operations.

Break-even Analysis

An assessment to determine the sales volume at which total revenues equal total costs, indicating no net loss or gain.