_________ inflation can be explained by an _________ shift in the aggregate _________ curve.
a. Demand-pull, rightward, demand
b. Cost-push, rightward, supply
c. Demand-pull, leftward supply
d. Cost-push, leftward, supply
QUESTION 2Why do people hold money (currency and checking account balances), and thereby forgo earning interest or dividends from a financial investment?
a. Some money is demanded for everyday transactions like parking fees, lunch, and buying groceries.
b. Some money is demanded as a precaution against unexpected costs such as automobile repairs, speeding tickets, or temporary loss of a job.
c. Some money is demanded for speculative purchases of stocks, bonds, or collectibles in case they become available at a particularly low price.
d. All of the above are correct.
QUESTION 3Economic growth is measured by the annual percentage increase in a nation's level of:
a. nominal GDP.
b. real GDP.
c. real GDP deflator.
d. economic indicators.
QUESTION 4Cost-push inflation occurs when the:
a. aggregate demand curve shifts leftward while the aggregate supply curve is fixed.
b. aggregate supply curve shifts leftward while the aggregate demand curve is fixed.
c. aggregate demand curve shifts rightward while the aggregate supply curve is fixed.
d. aggregate supply curve shifts rightward.
QUESTION 5The downward slope of the demand for money curve is created by the:
a. transactions demand for money.
b. precautionary demand for money.
c. speculative demand for money.
d. all of these.
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