At the Start of a Cost-Push Inflation

question 269

Multiple Choice

At the start of a cost-push inflation,

• A)the price level remains constant and real GDP decreases.
• B)the price level and real GDP both increase.
• C)the price level remains constant and real GDP increases.
• D)the price level rises and real GDP decreases.
• E)the price level rises and real GDP does not change.

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Definitions:

Cash Returns

Financial returns or profits that are received in the form of cash, as opposed to stock dividends or other non-liquid forms of return.

Inventory

Goods and materials held by a company for the ultimate goal of resale or production, including raw materials, work-in-progress, and finished goods.

Bank Credit Cards

Financial instruments issued by banks allowing cardholders to borrow funds up to a pre-approved limit for purchases or cash advances.

Credit Card Expense

Costs incurred from using a credit card, including interest charges, annual fees, and transaction fees.