If the aggregate demand curve shifts rightward,then _____.
A)the price level increases and output decreases
B)the resulting increase in the price level is usually called cost-push inflation
C)the resulting increase in the price level is usually called demand-pull inflation
D)the price level increases as long as the aggregate supply curve shifts leftward
E)the price level decreases and output decreases

Question

Quizplus · Accepted Answer

With a rightward shift in the aggregate demand curve, there is an increase in the overall demand for goods and services in the economy. This leads to a higher level of output and, in a tight labor market, an increase in wages as firms compete for workers. The increased demand for goods and services also puts upward pressure on prices, leading to demand-pull inflation. Therefore, choice C is the most accurate statement.

If the Aggregate Demand Curve Shifts Rightward,then _____