An Increase in the Rate of Inflation

question 85

Multiple Choice

An increase in the rate of inflation:

• A)Can only result from increases in aggregate demand
• B)Can only result from upward shifts in the short-run aggregate supply curve
• C)Will result only if the long-run aggregate supply curve is vertical
• D)Can result from shifts in either the dynamic aggregate demand curve or the short-run aggregate supply curve

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Definitions:

Net Fixed Assets

Net fixed assets refer to the total value of a company's property, plant, and equipment minus depreciation, representing the actual value of company's long-term assets being used in operations.

Dividend Payout Ratio

The percentage of a company's earnings that is distributed to shareholders in the form of dividends.

Debt-Equity Ratio

A ratio enumerating the financial strategy involving the use of equity and debt for asset financing.

Maximum Sales

The highest amount of sales a company can possibly achieve within a given timeframe under existing conditions.