At the Start of a Cost-Push Inflation

question 75

Multiple Choice

At the start of a cost-push inflation

• A) only real GDP changes while the price level remains constant.
• B) the price level and real GDP both increase.
• C) the price level rises and real GDP decreases.
• D) the price level rises and real GDP does not change.

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Definitions:

Earnings Per Share

A financial ratio that measures the amount of net income earned per share of stock outstanding.

Current Ratio

A liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Inventory Turnover

A ratio that measures the number of times inventory is sold and replaced over a certain period, indicating the efficiency of inventory management.

Return on Assets

A financial ratio that measures the profitability of a company in relation to its total assets.