What is the correct term for an inflation caused by a decrease in AS and accompanied by a decrease in employment and real output?
A)Demand pull inflation
B)Crowding out effect
C)Cost push inflation
D)Depreciation

Question

Quizplus · Accepted Answer

Cost push inflation is an inflation caused by a decrease in AS and accompanied by a decrease in employment and real output.
Key Takeaway: According to the Triangle Model, there are three types of inflation: built-in, demand-pull, and cost-push. Increased individual and government spending leads to demand-pull inflation, while an overall reduction in materials and goods supplies leads to cost-push inflation. The overall reduction of goods and materials causes a decrease in AS, employment, and real output.

What Is the Correct Term for an Inflation Caused by a Decrease