Because Increases in Inflation Reduce Planned Spending and Short-Run Equilibrium

question 141

Multiple Choice

Because increases in inflation reduce planned spending and short-run equilibrium output,the

• A) inflation adjustment (IA)line is downward-sloping.
• B) inflation adjustment (IA)line is upward-sloping.
• C) aggregate demand (ADI)curve is horizontal.
• D) aggregate demand (ADI)curve is downward-sloping.
• E) aggregate demand (ADI)curve is upward-sloping.

---

Definitions:

Purchases Discount

A reduction in the cost of goods or services, granted by the seller to the buyer, when the buyer pays within a specified time frame.

Sales Discount

A reduction in the price of goods or services offered to customers, typically to prompt quick payment or bulk purchases.

Trade Discounts

Reductions in the listed price of goods and services, offered by sellers to buyers in the business-to-business market.

Wholesalers

Businesses that buy goods in bulk from manufacturers or distributors and sell them in smaller quantities to retailers or other businesses.