Updated 10/22/2014 4:44:47 PM. Which of the following is NOT one of the theories of the causes of inflation? O Improved Consumer Confidence • Supply Shocks O Higher Productivity In Manufacturing Government Printing Money To Finance Spending * Previous No New Data To Save. Which of the following is not a microeconomics topic? Show transcribed image text. In economics, we refer to these as the demand-pull effect and the cost-push effect. b) Government prints money to finance its budget shortfall. 0 d) Consumer confidence falls due … B. Demand-Pull Theory. However, if the Fed follows a Taylor rule A rule for monetary policy in which the target real interest rate increases when inflation is too high and decreases when output is too low., it will react to the fact that output is below its target by reducing real interest rates with the aim of increasing spending and output. 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. A decrease n population growth would mean there will be reduced demand in the future and hence inflation will be lower. Select one: a. Inflation is often defined in terms of its supposed causes. 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 … • Your IP: 188.8.131.52 Which of the … Underemployment. Are We Wrong To Think We're Right? Or inflation is attributed to budget deficit financing. Inflation and reflect a dozen diverse views on one of the nation's central economic problems. Unfortunately, the urge to spend and invest in the face of inflation tends to boost inflation in turn, creating a potentially catastrophic feedback loop. Now its your turn, "The more we share The more we have". They know their homes and other investments will increase in value. C. Quantity Theory. When there's a surge in demand for goods across an economy, prices increase, and the result is … The following factors can be stated for the causes for inflation: 1. The mounting public expenditure is a basic reason for the excess demand in an economy. They expect to get raises and better jobs. Increase in supply of currency. Two major types of inflation can lead to an increase in prices. Which of the following is not a cause of inflation? Read The Balance's editorial policies. And the higher inflation gets, the less chance there is that savers will see any real return on their money. Expert Answer . Question: Question 2 Which Of The Following Is Not A Cause Of Inflation? Question: Which of the following is considered a cause of inflation? C. High level of public expenditure. Kimberly Amadeo has 20 years of experience in economic analysis and business strategy. A. Cost-Push Theory B. Demand-Pull Theory C. Quantity Theory D. Quality Theory Which of the following statements best explains the term inflation? They know their homes and other investments will increase in value. Devaluation – increasing cost of imported goods, also boost to domestic demand 4. Hyperinflation commonly occurs when there is a significant rise in money supplyQuantity Theory of MoneyThe Quantity Theory of Money refers to the idea that the quantity of money available (money supply) grows at the same rate as price levels do in the long run. Asked 10/18/2014 5:07:52 PM. According to the Keynesian framework, _____ may cause a recession, but not inflation. 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. Search for an answer or ask Weegy. There could be many reasons behind recurring inflation in the economy. Inflation is one term that we come across very often. Inflationary impacts are not distributed evenly across the population, therefore, inflation causes the economy to redistribute income across households. 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. B. a major trading partner’s economic slowdown. MEDIUM. 1. Decrease in population growth. Which of the following is NOT a factor that influences the business cycle? O c) The housing market recovers and home sales rise. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Cloudflare Ray ID: 5fc058defc74cc0c When … This causes prices to go higher and creates inflation. The following factors can be stated for the causes for inflation: 1. Expectations of inflation – causes workers to demand wage increases and firms to push up prices. A deficit budget may be financed by the additional money creation. Which of the following is not a cause of inflation? Inflation is the term used when prices and costs incrementally rise over time.