Demand–pull inflation occurs when increases until equilibrium output exceeds the full employment level.

Inflation target are based on the assessment of the monetary condition of the economy. *TRUE or FALSE

FILL IN THE BLANKS    Inflation measures the changes in the level of               in the economy. Demand-pull inflation is caused by a                shift in the aggregate demand curve, while cost-push inflation is caused by a              shift of the aggregate supply curve. When the price level is increasing by an extremely high rate, the economy is said to be experiencing                .  Stagflation occurs when the economy is experiencing high inflation, high unemployment, and low                    at the same time. To combat inflation, the government can use contractionary monetary policy which will also lead to                  interest rates. Note, however, that there is a short-run tradeoff between inflation and                 as illustrated by the Philips Curve. Inflation is stable when the unemployment rate is equal to the                     rate of unemployment.

Use a correctly labeled aggregate demand and aggregate supply graph to illustrate cost-push inflation. Given an example of what might cause cost-push inflation in the economy

Which one of the following will help to keep inflation down?       a central bank that supports more regulations for commercial banks   a central bank that is independent of Congress and the President   a central bank that is concerned about inequality   a central bank that is headed by a strong and influential chair

Which of the following could be responsible for the movement from A to point B? (Refer to attached image) a decrease in taxes a rash of bearishness or stock market crash a downward revision of inflation expectations an upward revision of inflation prices

In March of 2020, the Bank of Canada dropped the policy interest rate three times. Were these action in line with an inflation control policy?

If investment as a fraction of GDP rose substantially and then stayed at a high level, what would be the effect on aggregate supply over time? It will shift both the SRAS and LRAS right. It will shift the SRAS right, but not the LRAS. It will shift the LRAS to the left, but not the SRAS. It will shift both the SRAS and the LRAS left.

Assess the validity of the following statement:  An increase in government spending, the target inflation rate or the monetary base shifts the aggregate demand curve to the right.

which one is true Demand‑pull inflation is caused by   a decrease in short‑run aggregate supply to an equilibrium point below full employment.   an increase in aggregate demand to an equilibrium point below full employment.   a decrease in short‑run aggregate supply to an equilibrium point beyond full employment.   an increase in aggregate demand to an equilibrium point beyond full employment.   Cost‑push inflation is caused by   an increase in aggregate demand to an equilibrium point beyond full employment.   an increase in aggregate demand to an equilibrium point below full employment.   a decrease in short‑run aggregate supply to an equilibrium point beyond full employment.   a decrease in short‑run aggregate supply to an equilibrium point below full employment.