Economics (Irwin Economics)
21st Edition
ISBN: 9781259723223
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 31.7, Problem 2QQ
To determine
Inflationary expenditure gap.
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Students have asked these similar questions
With the aid of graphs, explain: (a) demand-pull inflation (b) cost-push inflation.
An inflationary gap occurs when: *
a. we need to increase prices
b. real output is too low.
c. potential output exceeds actual output.
d. actual output exceeds potential output.
Which is the correct order once the AD or SRAS has shifted to start the inflation process?
a. Prices increase in the shortage markets.
b. Shortages develop in some markets.
c. Prices throughout the economy rise. 
Chapter 31 Solutions
Economics (Irwin Economics)
Ch. 31.2 - Prob. 1QQCh. 31.2 - Prob. 2QQCh. 31.2 - Prob. 3QQCh. 31.2 - Prob. 4QQCh. 31.7 - Prob. 1QQCh. 31.7 - Prob. 2QQCh. 31.7 - Prob. 3QQCh. 31.7 - Prob. 4QQCh. 31 - Prob. 1DQCh. 31 - Prob. 2DQ
Ch. 31 - Prob. 3DQCh. 31 - Prob. 4DQCh. 31 - Prob. 5DQCh. 31 - Prob. 6DQCh. 31 - Prob. 7DQCh. 31 - Prob. 8DQCh. 31 - Prob. 1RQCh. 31 - Prob. 2RQCh. 31 - Prob. 3RQCh. 31 - Prob. 4RQCh. 31 - Prob. 5RQCh. 31 - Prob. 6RQCh. 31 - Prob. 7RQCh. 31 - Prob. 8RQCh. 31 - Prob. 9RQCh. 31 - Prob. 1PCh. 31 - Prob. 2PCh. 31 - Prob. 3PCh. 31 - Prob. 4PCh. 31 - Prob. 5PCh. 31 - Prob. 6PCh. 31 - Prob. 7PCh. 31 - Prob. 8PCh. 31 - Prob. 9PCh. 31 - Prob. 10P
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- Which of the following is wrong? Select one: a. Core inflation is the inflation that consumers feel when they buy their core products. b. Cost-push inflation occurs when factors such as rapid increases in the prices of imported raw materials drive up per-unit production costs at each level of output; higher costs push the price level upward. c. Demand-pull inflation occurs when total spending exceeds how much goods and services are provided at an exiting price level in an economy. d. Inflation is a rising general level of prices and is measured as a percentage change in a price index such as the CPI; deflation is a decline in the general level of prices.arrow_forwardDistinguish between demand-pull inflation and cost-push inflation. Which of the two types is most likely to be associated with a negative GDP gap? Which with a positive GDP gap and when the price is $1500.arrow_forwardExpectations of inflation are ____________ effective than/as actual inflation in ____________ production costs. a) less; increasing b) less; decreasing c) as; increasing d) as; decreasing e) more; increasingarrow_forward
- Assuming prices are sticky in the short run, a decrease in useful government spending will cause inflation to __________ in the short run and growth to ___________ in the short run. remain unchanged/decrease increase/increase decrease/increase decrease/decrease remain unchanged/remain unchangedarrow_forwardOne of the fiscal measures of dealing with inflation is: a. Implement a budget surplus b. Operate a budget deficit c. Increase the rate of interest d. Operate a balance budgetarrow_forwardthe relationship between the inflation rate and the unemployement rate related micro or macroeconomicsarrow_forward
- Which letter is correct in this multiple choice question? The lowest non-inflationary rate. It serves as a “floor” for policy makers. A. Employment B. Natural Unemployment C. Natural employment D. Real employmentarrow_forwardIn every election year, politicians sing their own praises of having stabilized prices through the attainment of single digit inflation. As a macroeconomist, explain three policy measures that could be used to fight inflationsarrow_forwardWhich of the following are CORRECT statements regarding inflation and real variables? Select ONLY THOSE THAT APPLY. Select 2 correct answer(s) If nominal interest rate is 10 percent, the inflation rate is 5 percent, and the tax rate is 30 percent, the real after-tax interest rate is 2 percent. Lower than anticipated inflation raises the real wage rate (adjusted for inflation) and workers gain at the expense of employers who lose. If the money wage rate is $30.00 an hour and the price level is 120, the real wage rate is $24.00.arrow_forward
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