Harmon Gray

11/15/2023 · Primary School

Which of the following statements are true? 1. For cost increases to lead to sustained inflation, there must be persistent rises in costs followed by persistent government efforts to return output to its potential level. 2. For cost increases to lead to sustained inflation, there must be persistent rises in costs coupled with wage flexibility that always returns the labour market to equilibrium. 3. For demand increases to lead to sustained inflation, there must be persistent increases in demand followed by persistent government efforts to return output to its potential level. 4. For demand increases to lead to sustained inflation, there must be persistent increases in demand couplec with wage flexibility that always returns the labour market to equilibrium. 1 and 3 only 1 and 4 only 2 and 3 only 2 and 4 only