A rightward shift in the aggregate demand curve generates a ________ inflation and ________ output.
A) demand-pull; lower
B) cost-push; higher
C) demand-pull; higher
D) cost-push; lower

Question

Quizplus · Accepted Answer

A rightward shift in the aggregate demand curve indicates an increase in demand for goods and services, leading to higher prices (inflation) and higher output. This is known as demand-pull inflation. Cost-push inflation is caused by increases in production costs, which can result in a leftward shift in the aggregate supply curve.

A Rightward Shift in the Aggregate Demand Curve Generates a ________