A Major Factor Leading to Demand-Side Inflation Is

question 37

Multiple Choice

A major factor leading to demand-side inflation is

• A) the existence of unions and firms with considerable market power.
• B) the presence of considerable slack in the economy.
• C) increases in spending when resources are fully employed.
• D) significant increases in the prices of important materials (for example, crude oil) in the short run.
• E) rapid growth of an economy's potential output.

---

Definitions:

Maturity Value

The amount to be received at the maturity date of an investment, typically the principal plus interest.

Note Duration

The term or length of time until a promissory note, bond, or other financial instrument reaches its maturity date.

Interest Rate

The percentage of a loan amount charged by the lender to the borrower for the use of assets, typically expressed on an annual basis.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate, representing its legal value.