In the Short-Run, Demand-Pull Inflation Increases

question 34

Multiple Choice

In the short-run, demand-pull inflation increases:

• A) Real wages, but in the long run only nominal wages
• B) Nominal wages, but in the long run only real wages
• C) Real output and the price level, but in the long-run only real output
• D) Real output and the price level, but in the long-run only the price level

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Definitions:

Short Selling

The practice of selling securities or other financial instruments that are not currently owned, and subsequently repurchasing them at a lower price.

Market Neutral

An investment strategy that seeks to avoid some forms of market risk by taking offsetting positions in different securities, aiming for a net market exposure of zero.

Government Regulation

The act of controlling business behavior through a set of rules or laws set forth by the government to achieve outcomes that might not be achieved through free markets.

Incentive Fee

An incentive fee is a fee charged by a fund manager based on the fund's performance, encouraging the manager to achieve superior returns.