What Could Be a Reason for a Rising Inflation Rate

question 103

Multiple Choice

What could be a reason for a rising inflation rate?

• A) A decrease in government spending
• B) A supply shock that shifts the aggregate supply curve downward
• C) Unemployment below the natural rate
• D) Growing consumer pessimism
• E) A negative spending shock.

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Definitions:

Unemployment

A situation in which individuals who are able and willing to work cannot find jobs.

Living Standards

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a geographic area.

Productivity

The efficiency with which inputs are converted into outputs, typically measured as the amount of goods and services produced per unit of labor.

Policymakers

Individuals or members of government bodies who are responsible for creating and implementing laws and policies.