On the Aggregate Supply Curve, an Increase in Inflation Causes

question 27

Multiple Choice

On the aggregate supply curve, an increase in inflation causes ________, while a price shock causes ________.

• A) upward movement along the curve; the curve to shift
• B) downward movement along the curve; the curve to shift
• C) the curve to shift; movement along the curve
• D) downward movement along the curve; upward movement along the curve
• E) Not enough information is given.

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Definitions:

Capital Gain Yield

Capital gain yield refers to the price appreciation component of the total return on an investment, expressed as a percentage increase from the asset's purchase price.

Dividend Yield

A financial index that reveals the proportion of yearly dividends paid out by a company to its stock price.

Annual Percentage Rate

The annual rate charged for borrowing or earned through an investment, accounting for any fees or additional costs associated with the transaction, expressed as a percentage.

Treasury Bill

Short-term, government-issued debt securities that mature in one year or less.