Asked by Erica Doherty on May 26, 2024
Verified
On a graph showing the aggregate demand and aggregate supply curves,stagflation can be represented by a:
A) leftward shift of the aggregate supply curve.
B) rightward shift of the aggregate supply curve.
C) upward movement along the aggregate supply curve.
D) rightward shift of the aggregate demand curve.
E) upward movement along the aggregate demand curve.
Stagflation
An economic condition characterized by slow growth, high unemployment, and high inflation, presenting a challenging environment for monetary policy.
Aggregate Supply
Aggregate supply is the total supply of goods and services that firms in an economy are willing and able to produce at a given overall price level in a specific time period.
- Discern the motivations for economic upheavals and the capacity of governmental strategies in tackling these upheavals.
- Evaluate the influence of government strategies on economic benchmarks like employment statistics, inflationary trends, and real gross domestic product.
Verified Answer
HN
Huzaif NaeemJun 01, 2024
Final Answer :
A
Explanation :
Stagflation occurs when there is a decrease in aggregate supply due to high inflation and reduced economic output. This results in a leftward shift of the aggregate supply curve as there is less supply available at each price level.
Learning Objectives
- Discern the motivations for economic upheavals and the capacity of governmental strategies in tackling these upheavals.
- Evaluate the influence of government strategies on economic benchmarks like employment statistics, inflationary trends, and real gross domestic product.