The Main Determinant of How Quickly Expected Inflation Adjusts to Changes

question 92

Multiple Choice

The main determinant of how quickly expected inflation adjusts to changes in monetary policy is

• A)the slope of the Phillips curve.
• B)the slope of the short-run aggregate supply curve.
• C)the credibility of the central bank.
• D)the degree of indexation in the economy.

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Definitions:

LIFO Cost Assumption

The LIFO Cost Assumption is a principle used in the LIFO inventory valuation method, assuming that the most recently acquired items are the first to be sold, impacting the reported income and inventory costs.

Inventories

Assets held for sale in the ordinary course of business, in the process of production for such sale, or in the form of materials to be consumed in the production process.

Consignment

A sales arrangement in which goods are entrusted to a seller, but title to the goods remains with the supplier until they are sold.

Consignor

The entity that owns goods but entrusts them to another (consignee) for sale, distribution, or safekeeping.