Question
Which of the following are short-run effects of demand-pull inflation?
Multiple select question.
An unaffected real output
A rise in real output
A rise in the price level
An unaffected price level
Multiple select question.
An unaffected real output
A rise in real output
A rise in the price level
An unaffected price level
Answers
GPT-4o mini
In the context of demand-pull inflation, the following options can be considered short-run effects:
1. **A rise in real output** - In the short run, increased demand can lead to higher production levels, resulting in an increase in real output.
2. **A rise in the price level** - Demand-pull inflation specifically indicates that an increase in overall demand leads to higher prices, thus resulting in a rise in the price level.
The other options (an unaffected real output and an unaffected price level) are not typical short-run effects of demand-pull inflation, as demand-pull inflation generally causes both an increase in real output and an increase in the price level.
1. **A rise in real output** - In the short run, increased demand can lead to higher production levels, resulting in an increase in real output.
2. **A rise in the price level** - Demand-pull inflation specifically indicates that an increase in overall demand leads to higher prices, thus resulting in a rise in the price level.
The other options (an unaffected real output and an unaffected price level) are not typical short-run effects of demand-pull inflation, as demand-pull inflation generally causes both an increase in real output and an increase in the price level.