Question

A. If you get a wage increase of 4%, but inflation is 5%, your real income (purchasing power) goes down. B. Cost push inflation is caused by a rightward shifting aggregate supply curve C. Demand pull inflation occurs as a result of a decrease in total spending D. Technological progress is likely to cause inflation.

Answer 1

A. If you get a wage increase of 4%, but inflation is 5%, your real income (purchasing power) goes down.

TRUE As the wage increase is lower than inflation rate in real term the purchase power of my wages decreases by 1%

Step-by-step explanation:

B. Cost push inflation is caused by a rightward shifting aggregate supply curve

FALSE it is a fall in the aggregate supply because of the increase in cost.

C. Demand pull inflation occurs as a result of a decrease in total spending

FALSE demand pull inflation would be when the total spending increase

D. Technological progress is likely to cause inflation.

FALSE we didn't expirement inflation during the industrial revolution or in the 90' with the rise of personnal computer