A demand-pull inflation process consists of ________ shifts in the AD curve and ________ shifts in the SAS curve.
A) rightward; rightward
B) rightward; leftward
C) leftward; rightward
D) leftward; leftward

Question

Quizplus · Accepted Answer

Demand-pull inflation is characterized by rightward shifts in the Aggregate Demand (AD) curve, which increases the price level and output in the short run. The Short-run Aggregate Supply (SAS) curve does not initially shift; instead, it may shift leftward in the long run if inflation expectations adjust or if resource prices increase as a result of the higher demand.

A Demand-Pull Inflation Process Consists of ________ Shifts in the AD