The short-run aggregate supply curve shows that inflation will change as a result of changes in ________.
A)output
B)potential output
C)expected inflation
D)price shocks
E)all of the above

Question

Quizplus · Accepted Answer

The short-run aggregate supply curve reflects how inflation can be influenced by changes in output, potential output, expected inflation, and price shocks. These factors can all affect the cost of production and, consequently, the prices of goods and services in the economy, leading to changes in inflation.

The Short-Run Aggregate Supply Curve Shows That Inflation Will Change