When the price level rises as a result of a decrease in aggregate supply, it is called cost-push inflation.

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Cost-push inflation occurs when a decrease in aggregate supply leads to an increase in the price level. This can be caused by factors such as increases in the cost of production or decreases in the availability of key inputs, leading to a decrease in the quantity of goods and services available in the economy. As a result, prices rise, and inflation occurs.

When the Price Level Rises as a Result of a Decrease