Which of the Following Can Cause Inflation

question 236

Multiple Choice

Which of the following can cause inflation?

• A) increases in short-run aggregate supply
• B) increases in long-run aggregate supply
• C) decreases in short-run aggregate supply
• D) decreases in aggregate demand

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Definitions:

Interest

The cost of borrowing money, typically expressed as an annual percentage rate, or the earnings from lending money.

Fixed-Rate Mortgage

A mortgage loan with an interest rate that remains unchanged for the entire term of the loan.

Adjustable Rate

This term often refers to a type of interest rate on a loan that can fluctuate over time, usually in accordance with a specified financial index.

Foreclosure

A legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.