9:34 5 Suppose Jeremy borrows S100 from Mike, at an interest rate of 7%. If the

Question

9:34 5 Suppose Jeremy borrows S100 from Mike, at an interest rate of 7%. If the inflation rate over the year turns out to be 5%, which of the following is true? is 12% 52. Which of the following could contribute to cost-push inflation? a Gecater demand for exots e. Higher wage demands by trade unis 3 The introduction of a new currency in developing countries is generally a sign of 54. Which of the following statements is true? the egalibiem price level and the oquilim lesvlecall G 55. The aggregate demand curve 56. The aggregate supply curve c. has a nagative slopc 57 Demand-pull inflation is caused by a(n) c. increase in the demand for a particular pood

Explanation / Answer

51. real rate of interest = nominal interest rate - inflation rate

real interest rate = 7% - 5%

real interest rate = 2%

so, the correct answer is an option (e)

52. cost push inflation is an inflation caused by an increase in the prices of inputs like labor wage rate, raw material etc.

higher wage rate demand by the trade unions could contribute the cost-push inflation.

so, the correct answer is an option (e).

53. the introduction of new currency in developing countries is generally a sign of hyperinflation.

so, the correct answer is an option (d).

54. The true statement is "The intersection of aggregate demand and aggregate supply curve determines the equilibrium price level and equilibrium level of real GDP.

So, the correct answer is an option ( d).

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