- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 11. Understanding Business Cycles
- Subject 7. Inflation
CFA Practice Question
Demand-pull inflation can be caused by ______.
II. increases in exports
III. increases in imports
IV. a restrictive fiscal policy
V. an expansionary monetary policy
VI. an appreciation of home currency
I. increases in investment
II. increases in exports
III. increases in imports
IV. a restrictive fiscal policy
V. an expansionary monetary policy
VI. an appreciation of home currency
Correct Answer: I, II and V
User Contributed Comments 6
| User | Comment |
|---|---|
| cong | VI is wrong because appreciating domestic currency leads more leakage (imports) than injections (exports) |
| Gooner7 | How is I right? An increase in investment leads to an increase in GDP [GDP = C + I + G + (net exports)] |
| bidisha | gooner: increase n investment -> increase in GDP growth-> inflation |
| geofin | Investments is a component of Aggregate Demand. Therefore, it can play role in the demand-pull inflation. |
| schweitzdm | I hate econ... |
| choas69 | add me to the list |