Which of the following would cause inflation?
A) The short-run aggregate supply curve shifts rightward.
B) The long-run aggregate supply curve shifts rightward.
C) The aggregate demand curve shifts rightward.
D) The aggregate demand curve shifts leftward.

Question

Quizplus · Accepted Answer

Inflation occurs when the aggregate demand for goods and services in an economy increases, which is represented by a rightward shift of the aggregate demand curve. This increase in demand leads to higher prices, as suppliers try to meet the higher demand with their existing capacity.

Which of the Following Would Cause Inflation