For supply-side inflation to occur in the long run
A) the aggregate demand curve has to shift to the left.
B) the aggregate demand curve has to shift to the right.
C) the long-run aggregate supply curve has to shift to the right.
D) the long-run aggregate supply curve has to shift to the left.

Question

Quizplus · Accepted Answer

Supply-side inflation occurs when the costs of production increase, leading to a decrease in the aggregate supply. This is represented by a leftward shift of the long-run aggregate supply curve.

For Supply-Side Inflation to Occur in the Long Run