-The figure above shows the aggregate demand, short- run aggregate supply, and long- run aggregate supply curves for the Australian economy. The economy is currently at point A. A cost- push rise in the price level will initially move the economy to point ________ and to point________.

Question

Quizplus · Accepted Answer

A cost-push rise in the price level is typically due to an increase in the cost of production, such as a rise in the money prices of raw materials. This would initially move the economy to point C. If aggregate demand increases, it would then move to point D.

-The Figure Above Shows the Aggregate Demand, Short- Run Aggregate