If AD and AS Increase at Exactly the Same Rate

question 157

Multiple Choice

If AD and AS increase at exactly the same rate, the result will be

• A)demand-side inflation.
• B)supply-side inflation.
• C)falling prices.
• D)stable prices.

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Definitions:

Non-Interest-Bearing Note

A promissory note with no interest charged on the principal; repaid at its face value at maturity.

Discount on Note Payable

The difference between the face value of a note payable and its issue price when the note is sold for less than its face value, effectively acting as an interest expense over time.

Interest Expense

Money that an entity has to pay over time for the privilege of borrowing funds.

Liquidity

The measure of a company's or individual's ability to meet short-term obligations without raising external capital, often reflected by the amount of cash or easily convertible assets.