An increase in the price level caused by a rightward shift of the aggregate demand curve is called:
A)cost-push inflation.
B)supply-shock inflation.
C)demand-shock inflation.
D)demand-pull inflation.
E)demand-push inflation.

Question

Quizplus · Accepted Answer

A rightward shift of the aggregate demand curve means that there is an increase in demand for goods and services, which leads to an increase in the price level. This is known as demand-pull inflation. Cost-push inflation is caused by an increase in production costs, and supply-shock inflation is caused by a sudden decrease in supply due to external factors such as natural disasters. Demand-push inflation is not a commonly used term in economics.

An Increase in the Price Level Caused by a Rightward