The Clearest Sign of Inflation Would Be A(n)

question 70

Multiple Choice

The clearest sign of inflation would be a(n)

• A)increase in the price level.
• B)increase in the quantity of total final output.
• C)decrease in the quantity of total final output.
• D)simultaneous increase in both output and prices.

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Definitions:

Monthly Compounded

Interest calculation method where interest is added to the principal balance monthly, leading to an increase in the amount of interest earned over periods.

Nominal Interest

The stated interest rate of a financial instrument, not accounting for inflation or compounding effects.

Compounded Semi-annually

Interest calculation method where the invested sum earns interest twice a year, and this interest is added to the principal for the computation of future interest.

Semi-annual Deposits

Deposits that are made twice a year into a financial account.