Author Question: In a period of reduced cost-push inflation but no change in real aggregate demand (Read 72 times)

fnuegbu · **on:** May 25, 2020

Question 1

Which one of the following could lead to lower cost-push inflation but higher demand-pull inflation?

◦

Higher import prices

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Reduced child benefit and pensions

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An increase in saving

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A cut in VAT and excise duties

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A rise in income tax

Question 2

In a period of reduced cost-push inflation but no change in real aggregate demand
◦ the price level and the level of real GDP will fall.
◦ the price level will rise and the level of real GDP will fall.
◦ the price level and the level of real GDP will rise.
◦ the price level will fall and the level of real GDP will rise.

amcvicar · **Reply #1 on:** May 25, 2020

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