Asked by Emily Ratliff on May 22, 2024

verifed

Verified

Cost-push inflation:

A) occurs when the aggregate demand curve shifts rightward.
B) occurs when the aggregate supply curve shifts rightward.
C) results in a decrease in the unemployment rate.
D) results in a movement along the aggregate demand curve.
E) is caused by the same factors that lead to demand-pull inflation.

Cost-Push Inflation

Inflation resulting from a rise in the cost of inputs such as labor, raw materials, and so forth, which subsequently reduces the availability of these goods.

Aggregate Demand Curve

A graphical representation showing the total demand for all goods and services in an economy at different price levels.

Aggregate Supply Curve

A graphical representation that shows the total quantity of goods and services producers are willing to supply at different price levels in an economy.

  • Pinpoint the variables responsible for inflation, namely cost-push and demand-pull factors.
verifed

Verified Answer

CC
Claudia CarrilloMay 27, 2024
Final Answer :
D
Explanation :
Cost-push inflation results in a movement along the aggregate demand curve because it is caused by an increase in the costs of production, which shifts the aggregate supply curve to the left, not by changes in aggregate demand. This type of inflation is not caused by the same factors that lead to demand-pull inflation, which is typically caused by an increase in aggregate demand.