Initially,demand-Pull Inflation Will

question 210

Multiple Choice

Initially,demand-pull inflation will

• A)increase the price level and not change real GDP.
• B)increase both the price level and increase real GDP.
• C)increase the price level and decrease real GDP.
• D)shift the aggregate supply curve rightward.
• E)decrease potential GDP.

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Definitions:

Current Cost

The cost that would be incurred to replace an asset or to purchase an equivalent asset at the current time.

Management Discretion

The degree of flexibility and judgement allowed to managers in making decisions and choices impacting the company's operations and performance.

FIFO

An inventory valuation method where the first items placed into inventory are the first ones sold (First In, First Out).

LIFO

Stands for Last In, First Out, an inventory valuation method which assumes that the last items placed in inventory are sold first.