Econ Unit 6 FA Dummy 6, 2025-26

Demand-pull inflation is best defined as:

• Inflation caused by rising production costs

• Inflation that occurs when aggregate demand increases faster than aggregate supply

• Inflation due to monetary expansion only

• Inflation resulting from supply shocks

Which of the following explains inflation driven by excessive demand in the economy?

• Demand-Pull Inflation

• Cost-Push Inflation

• Deflationary Gap

• Wage Rigidity

The type of inflation caused when demand outpaces supply leading to rising prices is called:

• Demand-Pull Inflation

• Structural Inflation

• Demand Deflation

• Price Stability

A study finds that when consumer spending and investment surge beyond production capacity, inflation rises. This is an example of:

• Demand-Pull Inflation

• Cost-Push Inflation

• Supply Shock

• Deflation

Suppose an economy experiences rapid growth in aggregate demand while supply remains unchanged, causing price increases. Which concept best explains this?

• Demand-Pull Inflation

• Monetary Contraction

• Supply-Demand Equilibrium

• Fiscal Austerity

An economist observes that expansionary fiscal policies led to higher demand and inflation. What kind of inflation is this?

• Demand-Pull Inflation

• Cost-Push Inflation

• Stagflation

• Demand Deflation

In a simulation, students see that when government spending and consumer confidence rise sharply, prices increase faster than supply. This illustrates:

• Demand-Pull Inflation

• Price Rigidity

• Supply-Side Shock

• Monetary Tightening

What term describes inflation that occurs when aggregate supply decreases due to increases in the cost of production?

• Demand-Pull Inflation

• Cost-Push Inflation

• Hyperinflation

• Deflation

Cost-push inflation is best defined as:

• Inflation caused by rising production costs leading to a decrease in aggregate supply

• Inflation caused by an increase in aggregate demand

• Inflation resulting from monetary policy changes

• Inflation caused by changes in consumer preferences

Which of the following explains inflation driven by higher costs of production reducing supply?

• Cost-Push Inflation

• Demand-Pull Inflation

• Stagflation

• Wage Rigidity