Asked by Kendrick Brown Jr. on May 08, 2024
Verified
If the aggregate supply curve shifts leftward,then _____.
A) the price level increases and output increases
B) the resulting increase in the price level is usually called cost-push inflation
C) the resulting increase in the price level is usually called demand-pull inflation
D) the price level increases as long as the aggregate demand curve shifts rightward
E) the price level decreases and output increases
Aggregate Supply Curve
displays the total output of goods and services that firms in an economy are willing to produce and sell at different price levels, in a given time period.
Cost-Push Inflation
Inflation caused by increases in the costs of production, such as raw materials or wages, leading to a decrease in supply and an increase in prices.
Demand-Pull Inflation
A situation where prices rise because the demand for goods and services exceeds their supply in the economy.
- Understand the causes of inflation, including both cost-push and demand-pull influences.
- Comprehend how fluctuations in aggregate demand and supply influence price levels and inflation rates.
Verified Answer
BD
Brittany DonaldsonMay 14, 2024
Final Answer :
B
Explanation :
A leftward shift in the aggregate supply curve indicates that the overall cost of production has increased, leading to higher prices for consumers. This is typically referred to as cost-push inflation, as opposed to demand-pull inflation. The increase in prices is usually accompanied by a decrease in output, as producers are less willing or able to supply goods and services at the higher prices.
Learning Objectives
- Understand the causes of inflation, including both cost-push and demand-pull influences.
- Comprehend how fluctuations in aggregate demand and supply influence price levels and inflation rates.