12.3 Shocks to the System
Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3
-Refer to Figure 12.3. The aggregate supply curve shifting from AS₁ to AS₂ will cause

Question

12.3 Shocks to the System
Refer to the information provided in Figure 12.3 below to answer the questions that follow. 12.3 Shocks to the System Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3 -Refer to Figure 12.3. The aggregate supply curve shifting from AS<sub>1</sub> to AS<sub>2</sub> will cause A) deflation. B) hyperinflation. C) demand-pull inflation. D) cost-push inflation.

12.3 Shocks to the System Refer to the information provided in Figure 12.3 below to answer the questions that follow. Figure 12.3 -Refer to Figure 12.3. The aggregate supply curve shifting from AS<sub>1</sub> to AS<sub>2</sub> will cause A) deflation. B) hyperinflation. C) demand-pull inflation. D) cost-push inflation.

Figure 12.3
-Refer to Figure 12.3. The aggregate supply curve shifting from AS₁ to AS₂ will cause

Quizplus · Accepted Answer

The shift in the aggregate supply curve from AS₁ to AS₂ indicates an increase in production costs, which causes a decrease in the short-run aggregate supply. This is known as a negative supply shock and results in cost-push inflation.