Refer to the diagram below. Assume that the nominal wages of workers in an economy are initially set on the basis of the price level P₂ and that the economy initially is operating at the full-employment level of output Q_f.In the short run, cost-push inflation could best be shown by a: A)leftward shift of the aggregate supply curve from AS₂ to AS₃. B)movement from point b to point c on AS₂. C)movement from point b point a on AS₂. D)rightward shift of the aggregate supply curve from AS₂ to AS₁.

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The Answer of Refer to the diagram below. Assume that the nominal wages of workers in an economy are initially set on the basis of the price level P₂ and that the economy initially is operating at the full-employment level of output Q_f.In the short run, cost-push inflation could best be shown by a: A)leftward shift of the aggregate supply curve from AS₂ to AS₃. B)movement from point b to point c on AS₂. C)movement from point b point a on AS₂. D)rightward shift of the aggregate supply curve from AS₂ to AS₁.

Refer to the Diagram Below