Students Again

Cost-push inflation

Is a by-product of business cycles that arise on the supply side.

We would expect higher interest rates on business loans to result in

A decrease in aggregate expenditures.

Other things equal, an appreciation of the U.S. dollar against other foreign currencies will result in

A decrease in domestic investment spending.

The inverse relationship between the general price level and real GDP is depicted by

The aggregate demand curve.

The short-run aggregate supply curve will shift to the right when

Nominal wage rates fall.

Assume the AD curve is held constant and short-run aggregate supply decreases. The result is

A decrease in equilibrium income and an increase in the price level.

Demand-Pull inflation

Is a by-product of business cycles that arise on the demand side.

If fewer businesses offered new bonds to raise investment funds because government borrowing had increased interest rates, this would be an example of

Crowding out.