Inflation Initiated by Increases in Wages or Other Resource Prices

question 252

Multiple Choice

Inflation initiated by increases in wages or other resource prices is labeled

• A)demand-pull inflation.
• B)demand-push inflation.
• C)cost-push inflation.
• D)cost-pull inflation.

---

Definitions:

Marginal Cost

The financial outlay for producing a further unit of a product or service.

Perfectly Competitive Firm

A business that operates in a market where there are many buyers and sellers, each selling identical products, and no single buyer or seller can influence market prices.

Short Run

In economics, it denotes a period in which at least one input (e.g., capital) is fixed and cannot be altered.

Economic Profit

The total revenue of a business minus its explicit and implicit costs; a measure of profitability that includes opportunity costs.