On the aggregate supply curve,an increase in inflation causes __________,while a price shock causes __________.
A)an upward movement along the curve;the curve to shift
B)downward movement along the curve;the curve to shift
C)the curve to shift;movement along the curve
D)downward movement along the curve;upward movement along the curve
E)Not enough information is given.

Question

Quizplus · Accepted Answer

An increase in inflation typically results in an upward movement along the aggregate supply curve, as higher prices lead to higher output levels. A price shock, such as a sudden increase in oil prices, causes the aggregate supply curve to shift, as it affects production costs and overall supply capacity.

On the Aggregate Supply Curve,an Increase in Inflation Causes __________,While