2. Demand-pull inflation can occur when… a) There is a shortage of investment and investors bid up interest rates. b) Inventories shrink and consumers bid up prices. c) There is a surplus of resources and so wages are bid up by employers. d) Undesired investment occurs.
2. Demand-pull inflation can occur when…
a) There is a shortage of investment and investors bid up interest rates.
b) Inventories shrink and consumers bid up prices.
c) There is a surplus of resources and so wages are bid up by employers.
d) Undesired investment occurs.
3. Which of the following groups is protected from a sudden increase in inflation?
a) Borrowers who have loans at fixed interest rates.
b) Fixed-income groups.
c) Workers who receive fixed wages under the multiyear contracts.
d) People who rent their homes under short-term lease agreements in comparison to those who own their
homes.
4 The multiplier process can occur when a decrease in investment spending…
a) Increases household saving, causing consumers to buy more goods and services.
b) Reduces household incomes, causing consumers to buy fewer goods and services.
c) Increases household incomes, causing consumers to buy fewer goods and services.
d) Reduces household incomes, causing consumers to buy more goods and services.
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