What Is the Crucial Difference Between Inflation Generated on the Demand

question 58

Multiple Choice

What is the crucial difference between inflation generated on the demand side versus inflation generated on the supply side?

• A)Demand-side inflation is short-lived, while supply-side inflation lasts for a long time.
• B)Demand-side inflation leads to budget surpluses, while supply-side inflation contributes to budget deficits.
• C)Supply-side inflation is subject to the control of policymakers, while demand-side inflation is beyond their reach.
• D)Demand-side inflation is normally accompanied by rising real GDP, while supply-side inflation may be accompanied by falling real GDP.

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Definitions:

Energy

The capacity to do work or produce change, existing in various forms such as kinetic, potential, thermal, electrical, and chemical energy.

Metabolic Pathway

A series of chemical reactions occurring within a cell that leads to the transformation of one substance into another.

Intermediate Products

Goods that are used in the production process to make other goods, not intended for final consumption.

Metabolism

The set of life-sustaining chemical reactions in organisms to convert food into energy, build molecules, and eliminate waste products.