The term cost-push inflation is caused by:
An increase in production costs that leads to higher prices
An increase in consumer demand for goods and services
An increase in government spending on infrastructure projects
An increase in the money supply by the central bank
Correct Answer :
A. An increase in production costs that leads to higher prices
Related Questions
The term sticky prices refers to:
Prices that do not change quickly in response to changes in supply and demand
Prices that are set by the government and cannot be changed by firms
Prices that are adjusted continuously in response to changes in the economy
Prices that are set by monopolies to maximize profit
The term opportunity cost refers to:
The value of the next best alternative that must be forgone when a decision is made to allocate resources to a particular use
The total cost incurred in producing a good or service
The cost incurred when a firm decides to shut down operations
The cost of goods and services in an open economy
Which of the following is a measure of the overall level of prices in an economy?
Consumer Price Index (CPI)
Gross Domestic Product (GDP)
Money Supply (M2)
Aggregate Demand (AD)
The term money market refers to:
The market for financial assets with maturities of one year or less
The market where foreign exchange rates are determined
The market for long-term government bonds
The market for commodities like gold and silver
The term comparative advantage refers to:
The ability of one country to produce a good or service at a lower opportunity cost than another country
The ability of one country to produce a good or service with fewer resources than another country
The ability of one country to produce a good or service at a higher opportunity cost than another country
The ability of one country to produce all goods and services more efficiently than another country
The term money multiplier refers to:
The ratio of the change in the money supply to the change in the monetary base
The ratio of government spending to the level of GDP
The ratio of taxes to disposable income
The ratio of investment to savings in an economy
If the government decreases taxes and increases government spending, it is implementing:
Expansionary fiscal policy
Contractionary fiscal policy
Expansionary monetary policy
Contractionary monetary policy
The term automatic stabilizers refers to:
Government policies that automatically adjust to stabilize the economy during economic fluctuations
The tools used by the central bank to stabilize the money supply
The policies implemented by the government to control inflation
The policies implemented by the government to control unemployment
The term marginal cost refers to:
The additional cost of producing one more unit of a good or service
The total cost of producing a given quantity of a good or service
The average cost of producing all units of a good or service
The fixed cost of producing a given quantity of a good or service
The term frictional unemployment refers to unemployment that occurs due to:
Temporary transitions between jobs or careers
Mismatch between the skills of workers and the skills required by employers
Changes in aggregate demand
Fluctuations in the business cycle
The term balance of payments refers to:
A record of all economic transactions between residents of a country and the rest of the world in a given period
The difference between government revenues and expenditures in a given period
The difference between exports and imports of goods and services in a given period
The total amount of money in circulation in a country
The term inflationary gap refers to a situation where:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low
If the government implements a policy of increasing the money supply to stimulate economic activity, it is employing:
Expansionary monetary policy
Contractionary monetary policy
Expansionary fiscal policy
Contractionary fiscal policy
The term capital stock in economics refers to:
The total amount of money in an economy
The total value of physical and human capital in an economy
The total amount of money held by households
The total amount of money held by businesses
The term velocity of money refers to:
The speed at which money changes hands in an economy
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
The term commodity money refers to:
Money that has intrinsic value, such as gold or silver
Money that is backed by the government's promise to exchange it for a commodity
Money that is used for international trade
Money that is created by the central bank
The term consumer surplus refers to:
The difference between the highest price a consumer is willing to pay for a good and the price they actually pay
The difference between the cost of production and the price at which a good is sold
The total amount of money spent by consumers on goods and services
The total amount of money earned by consumers from their jobs
Which of the following is a measure of income inequality?
Gini coefficient
Consumer Price Index (CPI)
Producer Price Index (PPI)
Lorenz curve
In macroeconomics, the term inflation refers to:
An increase in the overall price level of goods and services in an economy
A decrease in the overall price level of goods and services in an economy
An increase in the purchasing power of a currency
A decrease in the purchasing power of a currency
The term opportunity cost of capital refers to:
The return that could have been earned if the capital was used in an alternative investment
The total cost incurred in producing a good or service
The cost of goods and services in an open economy
The total cost of producing all units of a good or service
The Federal Reserve's main tool for controlling the money supply is:
Open market operations
Reserve requirements
Discount rates
Government spending
The term structural deficit refers to a deficit that exists even when the economy is operating at:
Full employment
Below full employment
A recessionary gap
An inflationary gap
The term monetary policy transmission mechanism refers to:
The process through which changes in monetary policy affect the overall level of economic activity
The process through which changes in fiscal policy affect the overall level of economic activity
The process through which changes in exchange rates affect the overall level of economic activity
The process through which changes in international trade affect the overall level of economic activity
The term deflation refers to:
A decrease in the overall price level of goods and services in an economy
An increase in the overall price level of goods and services in an economy
A decrease in the purchasing power of a currency
An increase in the purchasing power of a currency
The term tax multiplier refers to:
The change in output resulting from a change in government spending
The change in output resulting from a change in taxes
The change in consumption resulting from a change in disposable income
The change in investment resulting from a change in interest rates
The term open market operations refer to:
The buying and selling of government securities by the central bank to influence the money supply
The buying and selling of goods and services in international markets
The buying and selling of stocks in the stock market
The buying and selling of consumer goods in a free market economy
The term marginal revenue refers to:
The additional revenue earned from producing one more unit of a good or service
The total revenue earned by a firm
The total cost of producing a given quantity of a good or service
The additional cost of producing one more unit of a good or service
The term real wage rate refers to:
The purchasing power of wages after accounting for inflation
The nominal wage rate adjusted for taxes
The average wage rate in an economy
The wage rate set by the government
The term tax incidence refers to:
The way in which the burden of a tax is shared between buyers and sellers in a market
The total amount of revenue collected by the government from taxes
The impact of a tax on the overall level of prices in an economy
The distribution of income among different households in an economy
The term trade surplus occurs when:
Exports exceed imports
Imports exceed exports
Both exports and imports are equal
Both exports and imports are zero