Question 1

Which of the following can start a demand-pull inflation?
A) An improvement in technology
B) Zn increase in imports
C) A decrease in productivity
D) None of the above can start a demand-pull inflation.

Accepted Answer

Demand-pull inflation is typically caused by an increase in aggregate demand, not by the factors listed in the options.

Question 2

Demand-pull inflation could start with
A) an increase in government expenditure followed by an increase in the money wage rate.
B) a decrease in exports followed by a decrease in the quantity of money.
C) a rise in prices of raw materials followed by an increase in the quantity of money.
D) an increase in the quantity of money followed by a decrease in the money wage rate.

Accepted Answer

Demand-pull inflation occurs when there is an increase in aggregate demand (i.e. the total amount of goods and services that consumers, businesses, and the government are willing to buy). In choice A, an increase in government expenditure leads to an increase in aggregate demand, which puts upward pressure on prices. As a result, firms may increase their prices and workers may demand higher wages, leading to an increase in the money wage rate. This exacerbates inflationary pressures in the economy.  Choices B, C, and D do not describe the conditions that would lead to demand-pull inflation.

Question 3

Which of the following could lead to demand-pull inflation?
A) an increase in oil prices
B) an increase in the quantity of money
C) an increase in the money wage rate
D) a decrease in exports

Accepted Answer

An increase in the quantity of money can lead to demand-pull inflation as consumers have more money to spend and can bid up prices. A refers to cost-push inflation, C can lead to cost-push inflation, and D can lead to a decrease in demand, not demand-pull inflation.

Question 4

Demand-pull inflation starts as the
A) AD curve shifts rightward.
B) LAS curve shifts leftward.
C) AD curve shifts leftward.
D) LAS curve shifts rightward.

Accepted Answer

Demand-pull inflation is caused by increasing aggregate demand, which shifts the AD curve rightward. As demand increases, prices rise, stimulating an increase in production, leading to a rise in wages, and ultimately resulting in a sustained increase in prices.

Question 5

-Which of the above figures best shows the start of a demand-pull inflation?
A) Figure A
B) Figure B
C) Figure C
D) Figure D

Accepted Answer

Figure A typically represents the start of demand-pull inflation, where increased demand in an economy leads to higher prices.

Question 6

Demand-pull inflation starts with a shift of the
A) SAS curve rightward.
B) AD curve rightward.
C) AD curve leftward.
D) SAS curve leftward.

Accepted Answer

Demand-pull inflation is caused by an increase in aggregate demand (AD), which shifts the AD curve rightward, leading to higher price levels and output. The other options (A, C, D) describe scenarios that would not cause demand-pull inflation.

Question 7

-Which of the above figures best shows the start of a demand-pull inflation?
A) Figure A
B) Figure B
C) Figure C
D) Figure D

Accepted Answer

Figure A typically represents the start of demand-pull inflation, where increased demand in an economy leads to higher prices.

Question 8

Demand-pull inflation starts with
A) an increase in short-run aggregate supply.
B) a decrease in short-run aggregate supply.
C) a decrease in aggregate demand.
D) an increase in aggregate demand.

Accepted Answer

Demand-pull inflation occurs when there is an increase in aggregate demand. This can be caused by factors such as increased consumer spending, government spending, or business investment. The increase in demand leads to an increase in prices as producers respond to the higher demand by charging more for their goods and services.

Question 9

Which of the following can start an inflation?
A) a decrease in aggregate supply
B) an increase in aggregate supply
C) an increase in aggregate demand
D) Both answers A and C are correct.

Accepted Answer

A decrease in aggregate supply can lead to higher prices as goods become scarcer, while an increase in aggregate demand can push prices up as more money chases the same amount of goods. Both scenarios can initiate inflation.

Question 10

Demand-pull inflation can start when
A) money wage rates rise faster than prices.
B) the short-run aggregate supply curve shifts rightward.
C) the aggregate demand curve shifts rightward.
D) money wage rates rise but the price level does not change.

Accepted Answer

Demand-pull inflation occurs when the aggregate demand curve shifts rightward, causing an increase in the price level. Option A is incorrect because if money wage rates rise faster than prices, it would cause cost-push inflation, not demand-pull inflation. Option B is incorrect because if the short-run aggregate supply curve shifts rightward, it would cause a decrease in the price level and not demand-pull inflation. Option D is incorrect because if money wage rates rise but the price level does not change, it would cause a decrease in profits and output but not demand-pull inflation.

Question 11

Which of the following is NOT a potential start of a demand-pull inflation? A) an increase in government expenditure B) an increase in the quantity of money C) an increase in exports D) an increase in the money wage rate

Accepted Answer

An increase in the money wage rate is more likely to lead to cost-push inflation rather than demand-pull inflation, as it increases production costs rather than demand.

Question 12

Inflation can be started by
A) a decrease in aggregate supply or a decrease in aggregate demand.
B) an increase in aggregate supply or an increase in aggregate demand.
C) an increase in aggregate supply or a decrease in aggregate demand.
D) a decrease in aggregate supply or an increase in aggregate demand.

Accepted Answer

Inflation can be started by a decrease in aggregate supply, which leads to a decrease in goods available for purchase, causing prices to go up. Additionally, an increase in aggregate demand can also lead to inflation as there is a larger demand for goods and services, causing prices to rise. However, the most common cause of inflation is a decrease in aggregate supply. Therefore, the correct answer is D) a decrease in aggregate supply or an increase in aggregate demand.

Question 13

Which of the following is NOT a potential start of a demand-pull inflation? A) an increase in government expenditure B) an increase in exports C) an increase in the quantity of money D) an increase in taxes

Accepted Answer

An increase in taxes reduces disposable income and decreases consumer spending. Therefore, it is not a potential start of a demand-pull inflation, but rather a potential start of a contractionary policy. A, B, and C are all potential starts of a demand-pull inflation as they increase aggregate demand.

Question 14

Which of the following is a change that would NOT start a demand-pull inflation? A) an increase in exports B) an increase in the quantity of money C) an increase in labor productivity D) an increase in government expenditure on goods and services

Accepted Answer

An increase in labor productivity would increase the supply of goods and services, allowing for more output to be produced at a lower cost. This would not cause a demand-pull inflation as it would not result in an increase in the overall demand for goods and services. Options A, B, and D would all lead to increases in aggregate demand, which could cause demand-pull inflation.

Question 15

Which of the following could NOT start a demand-pull inflation? A) increases in oil prices B) increases in net exports C) increases in the quantity of money D) increases in government expenditure

Accepted Answer

Increases in oil prices would lead to cost-push inflation, not demand-pull inflation. Demand-pull inflation occurs when there is increased demand for goods and services, leading to an increase in their prices. Increases in net exports, quantity of money, and government expenditure could all potentially lead to an increase in demand and therefore demand-pull inflation.

Question 16

Demand-pull inflation is an inflation that results from an initial .
A) increase in natural resource prices
B) increase in aggregate demand
C) decrease in aggregate demand
D) increase in wage rates

Accepted Answer

Demand-pull inflation occurs when aggregate demand exceeds the available supply of goods and services, leading to an increase in prices. Therefore, an increase in aggregate demand is the initial cause of demand-pull inflation. The other options may contribute to inflation in different ways, but they are not the primary cause of demand-pull inflation.

Question 17

Which of the following could start a demand-pull inflation?
A) an increase in imports
B) a decrease in the quantity of money
C) an increase in government expenditure
D) an increase in the money prices of raw materials

Accepted Answer

An increase in government expenditure can lead to a demand-pull inflation as it increases the demand for goods and services in the economy. This increase in demand leads to a rise in prices, which can further fuel inflation. The other options are not likely to start a demand-pull inflation. An increase in imports may result in increased competition and lower prices. A decrease in the quantity of money may lead to deflation, as there is less money chasing the same amount of goods and services. An increase in the money prices of raw materials may lead to cost-push inflation, where the increased cost of production is passed on to consumers through higher prices.

Question 18

Increases in the quantity of money can start a ____________inflation and an increase in government expenditure can start a ____________inflation.
A) cost-push; cost-push
B) demand-pull; demand-pull
C) demand-pull; cost-push
D) cost-push; demand-pull

Accepted Answer

Increases in the quantity of money typically lead to demand-pull inflation, as more money in the economy increases demand for goods and services. Similarly, an increase in government expenditure also raises overall demand, leading to demand-pull inflation.

Question 19

Demand pull inflation can be started by
A) a decrease in net exports.
B) a decrease in the quantity of money.
C) an increase in government expenditure.
D) an increase in the price of oil

Accepted Answer

An increase in government expenditure means that the government is spending more money, which increases demand for goods and services. This increase in demand can lead to a rise in prices and therefore, demand pull inflation. The other choices do not necessarily lead to demand pull inflation. A decrease in net exports (A) can lead to a decrease in demand, while a decrease in the quantity of money (B) can lead to deflation. An increase in the price of oil (D) can lead to cost-push inflation, not demand pull inflation.

Question 20

Which of the following factors could start a demand-pull inflation ?
A) an increase in exports
B) a decrease in wage rates
C) a decrease in government expenditure
D) an increase in tax rates

Accepted Answer

An increase in exports could result in increased demand for goods and services, leading to increased prices and demand-pull inflation. Decrease in wage rates (B) and decrease in government expenditure (C) are more likely to lead to deflationary pressures. An increase in tax rates (D) could have an impact on prices, but it is not necessarily a direct cause of demand-pull inflation.

Quiz 12: U.S Inflation, Unemployment, and Business Cycle

Which of the following can start a demand-pull inflation?

Demand-pull inflation could start with

Which of the following could lead to demand-pull inflation?

Demand-pull inflation starts as the

-Which of the above figures best shows the start of a demand-pull inflation?

Demand-pull inflation starts with a shift of the

-Which of the above figures best shows the start of a demand-pull inflation?

Demand-pull inflation starts with

Which of the following can start an inflation?

Demand-pull inflation can start when

Which of the following is NOT a potential start of a demand-pull inflation?

Inflation can be started by

Which of the following is NOT a potential start of a demand-pull inflation?

Which of the following is a change that would NOT start a demand-pull inflation?

Which of the following could NOT start a demand-pull inflation?

Demand-pull inflation is an inflation that results from an initial .

Which of the following could start a demand-pull inflation?

Increases in the quantity of money can start a inflation and an increase in government expenditure can start a inflation.

Demand pull inflation can be started by

Which of the following factors could start a demand-pull inflation ?