During a Demand-Pull Inflation,if the Fed Tries to Maintain a Level

question 77

Multiple Choice

During a demand-pull inflation,if the Fed tries to maintain a level of real GDP above potential GDP,the AD curve will ________ and the AS curve will ________.

• A)shift rightward once;shift rightward continuously
• B)shift rightward continuously;shift rightward continuously
• C)shift rightward continuously;not shift
• D)not shift;shift rightward continuously
• E)shift rightward continuously;shift leftward continuously

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Definitions:

Maximize Profit

The primary goal of businesses to achieve the highest possible profit margin by optimizing revenue while minimizing costs.

Fixed Costs

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance premiums, providing stability in budgeting and planning.

Value-based Pricing

A pricing strategy where the price is set based on the perceived value to the customer rather than based on the cost of the product or historical prices.

Economic Value

The measure of the benefit provided by a good or service to an economic agent.