Cost Pull Inflation Occurs When The

question 21

Multiple Choice

Cost pull inflation occurs when the:

• A) price of a key input increases suddenly.
• B) price level changes in response to changes in the business cycle.
• C) price of necessity goods increases suddenly.
• D) business cycle becomes sporadic and unpredictable.

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Definitions:

Marginal Utility

The incremental utility or enjoyment gained from the consumption of one more unit of a good or service.

Opportunity Cost

Forgoing the chance to gain from other possibilities by selecting one option.

Consumer Behavior

The study of how individuals, groups, and organizations select, purchase, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and desires.

Marginal Utility

The added value or satisfaction experienced upon consuming an additional unit of a good or service.