When a Cost-Push Inflation Starts

question 69

Multiple Choice

When a cost-push inflation starts

• A) the price level falls and the money wages rises.
• B) real GDP rises faster than the quantity of money.
• C) the short-run aggregate supply curve shifts rightward.
• D) the price level rises and real GDP decreases.

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Definitions:

Rational Consumers

Individuals who make decisions to maximize their utility or satisfaction based on the information available and their own preferences.

Marginal Utility

The change in total satisfaction or utility that a consumer experiences as a result of consuming one additional unit of a good or service.

Framing Effects

The influence on an individual's decision-making caused by the way information is presented, rather than just the information itself.

Status Quo

The existing state of affairs; in prospect theory, the current situation from which gains and losses are calculated.