Which of the following contribute to the rise of inflation? I. the decline in government expenditures...
Which of the following contribute to the rise of
inflation?
I. the decline in government expenditures
II. the rise in commodity prices
III. the rise in labor costs
I, II and III
III only
II only
II and III
Homework Answers
Answer
Option 4
II and III
The increase in prices or labor cost increases inflation. Inflation is an increase in the price level of the economy. An increase in the labor cost increases the prices of goods and increases inflation. The decrease in government expenditure decreases inflation as the AD decreases and price level decreases.
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Which of the following contribute to the rise of
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