With cost-push inflation in the short run, there will be
A)an increase in real GDP.
B)a leftward shift in the aggregate demand curve.
C)a decrease in real GDP.
D)a decrease in unemployment.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when production costs increase, leading to a decrease in aggregate supply. This results in higher prices and a decrease in real GDP in the short run.

With Cost-Push Inflation in the Short Run, There Will Be