Supply-Side Inflation

question 32

Multiple Choice

Supply-side inflation

• A) is caused by rapidly increasing labor productivity.
• B) results from an increase in aggregate demand.
• C) leads to falling price levels.
• D) is a manifestation of the wage-price spiral.
• E) can occur only at full-employment levels of real GDP.

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Definitions:

Exemption

Exemption is a deduction allowed by law to reduce the amount of income that would otherwise be taxed. It can also refer to specific types of income or transactions that are legally excluded from taxation.

Terminal Illness

A disease or condition that is deemed incurable or irreversible and is expected to lead to the death of the patient within a short period of time.

Adverse Selection

A situation in financial markets where sellers have information that buyers do not, leading to transactions in which the buyer is at a disadvantage.

Life Insurance

This is a contract between an insurer and a policyholder in which the insurer guarantees payment of a death benefit to named beneficiaries when the insured dies.