Suppose the aggregate supply curve shifts leftward, causing inflation, what type of inflation is this called?
A) demand-push inflation
B) cost-push inflation
C) demand-pull inflation
D) cost-pull inflation

Question

Suppose the aggregate supply curve shifts leftward, causing inflation, what type of inflation is this called?  
A) demand-push inflation 
B) cost-push inflation 
C) demand-pull inflation 
D) cost-pull inflation

Quizplus · Accepted Answer

When the aggregate supply curve shifts leftward, causing inflation, it is called cost-push inflation. This is because the increase in inflation is caused by an increase in production costs, such as wages or raw material prices, which results in a decrease in the supply of goods and services. As a result, prices rise as producers pass on these increased costs to consumers.

Suppose the Aggregate Supply Curve Shifts Leftward, Causing Inflation, What