At full employment an increase in the quantity of money (ceteris paribus) can create a
A) demand-pull inflation, as can an increase in government expenditure.
B) demand-pull inflation, but an increase in government expenditure cannot.
C) cost-push inflation, as can an increase in government expenditure.
D) cost-push inflation, but an increase in government expenditure cannot.
E) demand-pull and a cost-push inflation, as can an increase in government expenditure.
Correct Answer:
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A)aggregate demand increases.
B)aggregate supply
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