Theoretically,one Can Distinguish a Demand-Pull Inflation from a Cost-Push Inflation

question 34

Multiple Choice

Theoretically,one can distinguish a demand-pull inflation from a cost-push inflation by comparing

• A)how fast prices rise relative to wages.
• B)the unemployment rate with its natural rate level.
• C)when prices rise relative to wages.
• D)government debt to real GDP.

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Definitions:

Midpoint Method

is a technique in economics used to calculate the elasticity of demand or supply, providing a more accurate measure by averaging the starting and ending points.

Elasticity of Demand

A measure of how sensitive the demand for a good or service is to changes in its price.

Quantity Demanded

The complete amount of a product or service that purchasers have the willingness and capacity to obtain at a set price.

Price Inelastic

A situation where the quantity demanded or supplied of a good is not significantly affected by changes in price.