Rising Inflation Accompanied by Constant or Falling Employment Can Be

question 13

Multiple Choice

Rising inflation accompanied by constant or falling employment can be described as:

• A)demand-pull inflation
• B)Okun's law
• C)deflation
• D)the Phillips curve
• E)stagflation

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one product for another.

Demand Curve

A curve showing the relation between the price of a good and the quantity consumers are willing and able to buy per period, other things constant.

Market Demand Curve

A graphical representation that depicts the total quantity of a good or service that all consumers in a market are willing and able to purchase at various prices.

Law of Demand

The economic principle stating that as the price of a good decreases, consumer demand for that good will increase, and vice versa, holding everything else constant.