Which of the Following Can Cause Demand-Pull Inflation If the Economy

question 137

Multiple Choice

Which of the following can cause demand-pull inflation if the economy is currently in equilibrium at full-employment GDP?

• A) An increase in net exports
• B) A reduction in government spending
• C) An increase in the company income tax rate
• D) A decrease in real wages

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Definitions:

Payment Receipt

A document that serves as proof of a transaction between two parties, indicating that payment has been made and received.

Including Interest

Refers to financial computations or transactions that take into account the accrual or payment of interest.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and recognize bad debt expense.

Adjusting Entry

Accounting entries recorded at the conclusion of a financial period for the purpose of assigning revenues and expenses to the time frame in which they were actually incurred.