Cost-Push Inflation

question 83

Multiple Choice

Cost-push inflation:

• A)occurs when the aggregate demand curve shifts rightward.
• B)occurs when the aggregate supply curve shifts rightward.
• C)results in a decrease in the unemployment rate.
• D)results in a movement along the aggregate demand curve.
• E)is caused by the same factors that lead to demand-pull inflation.

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Definitions:

Net Working Capital

The difference between a company's current assets and its current liabilities, indicating the short term liquidity of a company.

Net Capital Spending

This refers to the amount spent by a company on acquiring or maintaining fixed assets, such as equipment or buildings, after accounting for depreciation.

Average Tax Rate

The percentage of total income that is paid in taxes, calculated by dividing the total tax amount by the total income.

Capital Gains

The profit from the sale of an asset or investment when the selling price exceeds the purchase price.