At the start of a cost-push inflation
A) productivity rises.
B) real GDP increases faster than the quantity of money.
C) the short-run aggregate supply curve shifts rightward.
D) prices and unemployment are rising.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when the costs of production increase, leading to a decrease in aggregate supply (shown by a leftward shift in the short-run aggregate supply curve), which can cause prices to rise and unemployment to increase as companies produce less and may lay off workers.

At the Start of a Cost-Push Inflation