Figure 12.1 Aggregate Supply and Aggregate Demand

-Refer to Figure 12.1. The type of inflation depicted is called
A) "cost-push" inflation
B) "demand-pull" inflation
C) "income-depleting" inflation
D) "too many goods" inflation

Question

Figure 12.1 Aggregate Supply and Aggregate Demand
 
-Refer to Figure 12.1. The type of inflation depicted is called
A) "cost-push" inflation 
B) "demand-pull" inflation 
C) "income-depleting" inflation 
D) "too many goods" inflation

Quizplus · Accepted Answer

Cost-push inflation occurs when prices increase due to rises in production costs, such as raw materials and wages, leading to a decrease in the supply of these goods.