Question : The wealth effect suggests that an increase in the price level leads to:

Option 1: A decrease in consumption expenditure
 

Option 2: An increase in consumption expenditure
 

Option 3: A decrease in investment expenditure

Option 4: An increase in investment expenditure

Question : According to the Phillips curve, a decrease in unemployment is likely to result in:

Option 1: Higher inflation
  

Option 2: Lower inflation
    

Option 3: No change in inflation

Option 4: Deflation

Question : Cost-push inflation occurs when:

Option 1: There is an increase in aggregate demand
  

Option 2: There is a decrease in aggregate demand
  

Option 3: There is an increase in aggregate supply

Option 4: There is a decrease in the aggregate supply

Question : The interest rate effect states that an increase in the price level leads to:

Option 1: An increase in the interest rate
 

Option 2: A decrease in the interest rate
  

Option 3: No change in the interest rate

Option 4: An increase in savings

Question : The aggregate supply curve shows the relationship between:

Option 1: Price level and aggregate demand
 

Option 2: Price level and real GDP
 

Option 3: Interest rate and investment expenditure

Option 4: Inflation and unemployment