In the Case of Demand-Pull Inflation, Other Things Being Equal

question 110

Multiple Choice

In the case of demand-pull inflation, other things being equal:

• A) both the inflation rate and the unemployment rate rise at the same time.
• B) the unemployment rate rises but the inflation rate falls.
• C) the inflation rate rises but the unemployment rate falls.
• D) both the inflation rate and the unemployment rate fall.

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Definitions:

Cost Of Goods Sold

The direct costs related to the production of the goods sold by a company, including materials and labor.

Direct Materials

Costs of raw materials that are directly used in the production of a product, easily traceable to the product being manufactured.

Direct Labor

The labor costs directly associated with the production of goods or services, including wages of workers directly involved in production.

Manufacturing Overhead

All manufacturing costs that are not directly related to the production of a product, including indirect materials, labor, and other expenses.