Because the aggregate supply curve rises more steeply as the economy approaches full employment,
A)Inflation tends to accelerate.
B)The recessionary GDP gap becomes larger.
C)Aggregate demand shifts to the left.
D)It becomes easier to reach full employment.

Question

Quizplus · Accepted Answer

As the economy approaches full employment, the aggregate supply curve rises more steeply, meaning that it becomes increasingly difficult for firms to produce more output. This can lead to cost-push inflation as firms increase their prices in response to higher production costs.

Because the Aggregate Supply Curve Rises More Steeply as the Economy