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Introduction to Economics 2
Introduction to Economics 2 Deneme Sınavı
Introduction to Economics 2 Deneme Sınavı Sorusu #349920
Introduction to Economics 2 Deneme Sınavı Sorusu #349920
Which of the following is considered to be the most important cause of continuous price increases?
Increasing aggregate demand for intermediate goods
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Increasing input prices in the production process |
Increasing interest rates in the economy
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Increasing fixed costs for the productive units in the economy
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Accommodating monetary policy followed by the central bank |
Yanıt Açıklaması:
While expansionary fiscal policy creates initial price increase, the accommodating monetary policy causes prices to increase gain and again (continuously). Therefore, we can conclude that inflation occurs only with continuously increasing supply of money. This confirms the idea that inflation is always a monetary phenomenon.
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