Which of the following changes will necessarily cause inflation?

1) A decrease in aggregate demand and a decrease in short-run aggregate supply.
2) A decrease in aggregate demand and an increase in short-run aggregate supply.
3) A decrease in aggregate demand with no change in short-run aggregate supply.
4) An increase in aggregate demand and a decrease in short-run aggregate supply.
5) An increase in aggregate demand and an increase in short-run aggregate supply.

Answers

Answer 1

Option 4, "An increase in aggregate demand and a decrease in short-run aggregate supply," will necessarily cause inflation.

Inflation is a sustained increase in the general price level of goods and services in an economy over time. When aggregate demand increases, there is upward pressure on prices, as consumers are willing to pay more for goods and services. When short-run aggregate supply decreases, there is a decrease in the quantity of goods and services that firms are able to produce in the short term, which can result in higher prices due to a shortage of supply.

Therefore, an increase in aggregate demand and a decrease in short-run aggregate supply will lead to an increase in the price level of goods and services, causing inflation.

Related Questions

What happens if a student with straight A's does not meet the requirements for the Idaho Standards Achievement Test math portion, but exceeds the english requirement?

Answers

Answer: If a student with straight A's does not meet the requirements for the Idaho Standards Achievement Test math portion but exceeds the English requirement, it will depend on the policies of the school or district. In some cases, the student may be required to retake the math portion of the test or complete additional coursework in math to demonstrate proficiency. In other cases, the student may be allowed to graduate or move on to the next grade level based on their overall academic performance, despite not meeting the requirements for the math portion of the test. Ultimately, the decision will depend on the specific policies of the school or district and the individual circumstances of the studen

Explanation:

20ax - x= 5 in the equation above, a is a constant if the equation has no solution, what is the value of a ?

Answers

To solve the equation 20ax - x = 5, we can factor out x from the left side of the equation:

20ax - x = 5
x(20a - 1) = 5

For this equation to have no solution, the left side of the equation must be equal to 0 (since any number multiplied by 0 is 0). Therefore, we can set the expression inside the parentheses equal to 0 and solve for a:

20a - 1 = 0
20a = 1
a = 1/20

So if the equation 20ax - x = 5 has no solution, then the value of a is 1/20.

The part of the business cycle in which output, or Real GDP, increases and cyclical unemployment decreases is the _____.
1.Expansion
2.Contraction
3.Trough
4.Peak

Answers

The part of the business cycle in which output, or Real GDP, increases and cyclical unemployment decreases is the Expansion. The correct answer is (1)

What you should know about Business Cycle

Business Cycle refers to the fluctuations in economic activity that an economy experiences over time.

There are four main phases of the business cycle. There are listed below:

expansion, peak, contraction, and trough.

Learn more about business cycle here:

https://brainly.com/question/30167432

#SPJ1

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