Cost-push inflation:
A)occurs when the aggregate demand curve shifts rightward.
B)occurs when the aggregate supply curve shifts rightward.
C)results in a decrease in the unemployment rate.
D)results in a movement along the aggregate demand curve.
E)is caused by the same factors that lead to demand-pull inflation.

Question

Quizplus · Accepted Answer

Cost-push inflation results in a movement along the aggregate demand curve because it is caused by an increase in the costs of production, which shifts the aggregate supply curve to the left, not by changes in aggregate demand. This type of inflation is not caused by the same factors that lead to demand-pull inflation, which is typically caused by an increase in aggregate demand.

Cost-Push Inflation