When a Price Shock Occurs,the Inflation Rate Is Affected ________

question 50

Multiple Choice

When a price shock occurs,the inflation rate is affected ________.

• A)only in the period of the price shock
• B)only in the period after the price shock
• C)only if the price shock causes a change in output
• D)only if the price shock persists for more than one period
• E)none of the above

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Definitions:

Equity

Equity refers to fairness or justice in the way people are treated and involves ensuring equal opportunities and rights for all individuals.

Benefits Principle

A theory in taxation where taxes are apportioned according to the benefits received by taxpayers; those who benefit more from government services, pay more taxes.

Federal Government

The national government of a federal country, which holds the authority over matters that affect the country as a whole.

Horizontal Equity

The principle that individuals with similar incomes or circumstances should be taxed at the same rate.