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Questions and Answers
What are the shifters of Aggregate Demand (AD)?
What are the shifters of Aggregate Demand (AD)?
- Consumer saving, Business investment, Government borrowing, Trade deficit
- Consumer income, Business profit, Government surplus, Trade surplus
- Consumer spending, Investment spending, Government spending, Net exports (correct)
- Consumer debt, Corporate investment, Government subsidies, Net imports
What is the cause of Demand-Pull Inflation?
What is the cause of Demand-Pull Inflation?
- AD falls, leading to lower prices and output
- AS increases due to decreased production costs, leading to lower prices and higher output
- AD increases faster than AS, leading to higher prices and output (correct)
- AS decreases due to increased production costs, leading to higher prices and lower output
What is the primary tool of Monetary Policy?
What is the primary tool of Monetary Policy?
- Manipulating the money supply and interest rates (correct)
- Influencing consumer behavior
- Adjusting government spending
- Changing tax rates
What is the recommended fiscal approach during a period of inflation?
What is the recommended fiscal approach during a period of inflation?
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What are the impacts of Covid-19 on inflation according to the text?
What are the impacts of Covid-19 on inflation according to the text?
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