Demand-Side Inflation Is Normally Accompanied by

question 176

Multiple Choice

Demand-side inflation is normally accompanied by

• A)falling real GDP, while supply-side inflation may be accompanied by rising real GDP.
• B)falling real GDP; the same is true of supply-side inflation.
• C)rising real GDP, while supply-side inflation may be accompanied by falling real GDP.
• D)rising real GDP; the same is true of supply-side inflation.

---

Definitions:

Elastic Demand

A market condition where the quantity demanded of a product changes significantly in response to price changes.

Inelastic Demand

A market situation where the quantity demanded of a product does not change significantly when its price varies.

Price Elasticity

A measure of how much the demand for a product changes in response to a change in its price.

Demand

The total quantity of a product or service that consumers are willing and able to purchase at a given price.