Decrease in population growth. A few weeks ago, I wrote a news article for ChessBase in which I summarized the discussions and conclusions of the recent K Factor meeting in Athens, Greece. Are We Wrong To Think We're Right? O Improved Consumer Confidence • Supply Shocks O Higher Productivity In Manufacturing Government Printing Money To Finance Spending * Previous No New Data To Save. Inflation is best defined as being: (a) a phenomenon caused exclusively be excessive money supply growth; (b) the increase in living standards associated with rising wages universally; (c) the economic outcome that results from inappropriate fiscal policy; (d) a … Last Checked At 2:32pm = This problem has been solved! • There are five causes of demand-pull inflation. Which of the following is not a cause of inflation a An increase in the average from ACCOUNTING 101 at Angeles University Foundation Updated 10/22/2014 4:44:47 PM. Inflation is one term that we come across very often. Cost-push inflation. Which of the following is NOT a form of unemployment? b. producers raise prices to meet higher costs. But the situation of monetary expansion or budget deficit may not cause price level to rise. Cloudflare Ray ID: 5fc058defc74cc0c Inflation tends to cause things to be less predictable and this makes planning more difficult: Yes, that's correct. The correct answer is , as inflation tends to lead to less certainty and so business becomes less likely to invest and expand. Follow Linkedin. If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. Answer. Rating. D. Quality Theory . A decrease n population growth would mean there will be reduced demand in the future and hence inflation will be lower. Which of the following is NOT one of the theories of the causes of inflation? Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. The following is considered a cause of inflation: Producers raise prices to meet higher costs. Updated 8/8/2014 10:13:33 AM. Inflation is state in which the value of money is falling, i.e. She writes about the U.S. Economy for The Balance. Well done. Question. This situation is summarized in Figure 11.9 "The Gains to Inflation". Inflation exists when money supply exceeds available goods and services. Inflation exists when money supply exceeds available goods and services. Select one: a. For example: They feel that the government is doing the right thing in guiding the economy. Demand-pull inflation happens when an economy experiences an increased demand for consumer goods. Which of the following is not a cause of Inflation? Then Give Right Answer Below As Comment. B. Inflation is often defined in terms of its supposed causes. 1 Answer/Comment. Which of the following is not a cause of inflation? Critics of wage-push inflation theory put forward the arguments against wage rise as a sufficient and independent cause of inflation. According to the Keynesian framework, which of the following may help a country reduce inflation, but will not help that country to get out of a recession? 1. a major trading partner’s economic slowdown. Inflation can arise from internal and external events; Some inflationary pressures direct from the domestic economy, for example the decisions of utility businesses providing electricity or gas or water on their tariffs for the year ahead, or the pricing strategies of the food retailers based on the strength of demand and competitive pressure in their markets. Causes of Inflation. Which of the following is not a cause of inflation A hyper inflation B cost from ECONOMICS EC102 at University of the South Pacific, Fiji Or inflation is attributed to budget deficit financing. This causes prices to go higher and creates inflation. The first is a growing economy. A. a decrease in the tax rate on consumer income The following is considered a cause of inflation: Producers raise prices to meet higher costs. Search for an answer or ask Weegy. They know their homes and other investments will increase in value. Which of the following is not a cause of inflation? The same amount of such a product will cost more and more money as long as this situation continues. 0 Answers/Comments. This is inflation driven by consumers. Which of the … Asked 8/8/2014 9:56:49 AM. Demand-pull inflation is a tenet of Keynesian economics that describes the effects of an imbalance in aggregate supply and demand.   When families feel confident, they spend more instead of saving. The first is a growing economy. c. Demand-pull inflation is about spending. In that article, I promised that I would have much more to say about some of the topics. This is demand-pull inflation causing cost increases. A. Which of the following is not one of the possible causes of an increase in inflation? O a) Poor weather patterns lead to a supply shock in the farming industry. Periods of rapid inflation occur when the prices of goods and services in an economy suddenly rise, eroding the purchasing power of savings. Which of the following is not a cause of inflation? Expert Answer . Critics of wage-push inflation theory put forward the arguments against wage rise as a sufficient and independent cause of inflation. With the increase in public expenditure new projects will be implemented increasing the employment opportunities. The reasons for a decline in average prices B. Two major types of inflation can lead to an increase in prices. According to the Keynesian framework, _____ may cause a recession, but not inflation. When inflation is too high of course, it is not good for the economy or individuals. A. Cost-Push Theory B. Demand-Pull Theory C. Quantity Theory D. Quality Theory Which of the following statements best explains the term inflation? No, that's not right. A. Which of the following factors would not cause demand-pull inflation? When the aggregate demand … Cost-push inflation – higher oil prices feeding through into higher costs 3. Simply put, it is caused by dramatically increasing th… Comment any other details to improve the description, we will update answer while you visit us next time...Kindly check our comments section, Sometimes our tool may wrong but not our users. When interest rates fall or taxes decrease and the access to money becomes less restricted, consumers become less sensitive to price changesthat is not supported by economic growth. Which of the following is the index used to measure changes in gross domestic product? 8. alfred123. According to the Keynesian framework, which of the following may help a country reduce inflation, but will not help that country to get out of a recession? Inflation tends to lead to less certainty and so business becomes less likely to invest and expand. When there's a surge in demand for goods across an economy, prices increase, and the result is … Five Causes of Demand-Pull Inflation . Option C When the … d. increase in supply of money. Inflation is the term used when prices and costs incrementally rise over time. There could be many reasons behind recurring inflation in the economy. Show transcribed image text. a. wages go down. Which of the following is true about inflation? There are five causes of demand-pull inflation. They may not have time to build the manufacturing needed to boost supply. Question: Which of the following is considered a cause of inflation? B. b) Government prints money to finance its budget shortfall. B. Demand-Pull Theory. For example, if wages are increasing because of a rapid expansion in demand, then they are simply reacting to market pressures. MEDIUM. Follow Twitter. Inflation: A situation of a steady and sustained rise in general prices is usually known as inflation.   When families feel confident, they spend more instead of saving. The mounting public expenditure is a basic reason for the excess demand in an economy. They expect to get raises and better jobs. Excessive government spending b. Despite this is not the only cause of inflation a demand that continually grows and exceeds the supply inflates the price of that/those product(s) what certainly leads to an imbalance between the money and the goods. Demand-Pull Inflation . C. Quantity Theory. Inflation causes the real interest rate to change which can make it more difficult to borrow and lend money. Now its your turn, "The more we share The more we have". Read The Balance's editorial policies. Devaluation – increasing cost of imported goods, also boost to domestic demand 4. a. increase in demand for goods and services b. increase in cost of raw materials c. increase in demand for money. Cost-push inflation occurs when firms respond to rising costs by increasing prices in order to protect their profit margins.. Producers can't make enough to meet demand. New answers. Confirmed by Janet17 [10/22/2014 4:44:47 PM] Get an answer. Bases on demand side or cost side factors, generally there are two causes of inflation: Demand-Pull Inflation: There is mismatch in demand and supply. The following factors can be stated for the causes for inflation: 1. Causes of Inflation. B. Asked 10/18/2014 5:07:52 PM. Decrease in population growth. Which of the following is not a cost created by high inflation? Or inflation is attributed to budget deficit financing. B. 1 Rapid Growth of costly imports 2 Slow Growth of Individual output 3 Slow Growth in Population 4 Slow Growth of agr A. Rating Inflation - Its Causes and Possible Cures By Jeff Sonas. (i) In a number of cases, wage increases are not autonomous, but are induced by the operation of demand-pull factors. s. Log in for more information. Which of the following is not a cause of inflation? Additional spending by households. 2. Answer. Unfortunately, the urge to spend and invest in the face of inflation tends to boost inflation in turn, creating a potentially catastrophic feedback loop. 3. Implicit GDP price deflator. Updated September 17, 2020 Inflation reduces the purchasing power of each unit of currency, which leads to increases in the prices of goods and services over time. 0 d) Consumer confidence falls due … The following is considered a cause of inflation: Producers raise prices to meet higher … But the situation of monetary expansion or budget deficit may not cause price level to rise. Underemployment. C. High level of public expenditure. Demand-pull inflation – aggregate demand growing faster than aggregate supply (growth too rapid) 2. 5. Your IP: 167.172.70.208 In economics, we refer to these as the demand-pull effect and the cost-push effect. 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