Refer to the graph above. Assume that the economy is initially at equilibrium at point C, and that the government has adopted a "hands-off" policy approach. If demand-pull inflation occurs, then the final long-run equilibrium point will be point __; while if cost-push inflation occurs (starting at point C), then the final long-run equilibrium point will be point __.
A) A; C
B) D; B
C) A; A
D) D; A

Question

Refer to the graph above. Assume that the economy is initially at equilibrium at point C, and that the government has adopted a "hands-off" policy approach. If demand-pull inflation occurs, then the final long-run equilibrium point will be point __; while if cost-push inflation occurs (starting at point C), then the final long-run equilibrium point will be point __.
A) A; C 
B) D; B 
C) A; A 
D) D; A

Quizplus · Accepted Answer

The Answer of  Refer to the graph above. Assume that the economy is initially at equilibrium at point C, and that the government has adopted a "hands-off" policy approach. If demand-pull inflation occurs, then the final long-run equilibrium point will be point __; while if cost-push inflation occurs (starting at point C), then the final long-run equilibrium point will be point __.
A) A; C 
B) D; B 
C) A; A 
D) D; A

Refer to the Graph Above