Inflation caused by continually decreasing short-run aggregate supply is
A) cost-pull inflation.
B) cost-push inflation.
C) demand-pull inflation.
D) demand-push inflation.

Question

Quizplus · Accepted Answer

Cost-push inflation occurs when there is a decrease in aggregate supply, resulting in higher prices due to increased production costs. In this case, as short-run aggregate supply continues to decrease, producers are experiencing higher costs to produce goods and services, leading to higher prices for consumers.

Inflation Caused by Continually Decreasing Short-Run Aggregate Supply Is