In Which Case,if Any,will Inflation Remain Higher After a Temporary

question 50

Multiple Choice

In which case,if any,will inflation remain higher after a temporary adverse supply shock?

• A)both when the central bank maintains a higher money supply growth rate and when the central bank does nothing
• B)only if the central bank does nothing
• C)only if the central bank maintains a higher money supply growth rate
• D)None of the above is correct.Whether the central bank maintains a higher money supply growth rate or not,the inflation rate will return to its original level.

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Definitions:

Credit Sale

Transactions where goods or services are sold by providing credit to the customer, with payment to be received at a later date.

Merchandise Return

Goods returned by the buyer to the seller after purchase due to defects, dissatisfaction, or other reasons, often resulting in a reversal or adjustment of the initial sale transaction.

Sales Tax

A government-imposed tax on sales of goods and services, paid by the purchaser and collected by the seller.

Credit Customer

A customer who purchases goods or services on credit, paying at a later date rather than at the time of sale.