An increase in the rate of spending growth must flow into either higher inflation or:
A) higher deflation.
B) lower inflation.
C) higher growth.
D) lower growth.

Question

Quizplus · Accepted Answer

An increase in the rate of spending growth can lead to higher growth in the economy as more spending can stimulate demand, leading to increased production and potentially higher economic growth. Higher inflation is another possible outcome if the increased spending surpasses the economy's capacity to produce, leading to price increases.

An Increase in the Rate of Spending Growth Must Flow