If Increases in Total Spending Are Not Offset by Increases

question 35

Multiple Choice

If increases in total spending are not offset by increases in the supply of goods and services, the average level of prices will rise. Which of the following is responsible?

• A) Cost-push inflation
• B) Profit-push pressures
• C) Demand-pull inflation
• D) Wage-push pressures
• E) Unemployment

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Definitions:

Tariffs

Taxes imposed by a government on goods and services imported from other countries, used to control trade, raise government revenue, or protect domestic industries.

Import Quotas

Import Quotas are government-imposed limits on the quantity of certain goods that can be imported, aiming to protect domestic industries.

Debt Relief

A measure or a set of measures aimed at reducing or restructuring the debt of an individual, corporation, or nation to alleviate financial burden.

Foreign Aid

Economic, technical, or military assistance given by one country to another for the purpose of relief and rehabilitation, economic stabilization, or mutual defense.