Demand-Pull Inflation Is Worse for an Economy Than Cost-Push Inflation

question 187

True/False

Demand-pull inflation is worse for an economy than cost-push inflation because in addition to higher prices, demand-pull inflation also reduces employment.

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Definitions:

Journal Entry

A record in the books of accounts that captures the financial transactions of a business.

Discount on Bonds Payable

The disparity between a bond's nominal value and its market price, occurring when the bond is traded at a price below its nominal value.

Straight-line Amortization

An accounting method of incrementally reducing the cost value of an intangible asset over its useful life.

Interest Payment

The payment a borrower makes to a lender as compensation for the use of borrowed money.