Refer to the graph above. A shift from AS₁ to AS₂ would be consistent with what economic event in U.S. history? A) Demand-pull inflation in the late 1960s B) Cost-push inflation in the mid-1970s C) Full-employment in the late 1990s D) Great Recession in 2007-2009

Question

Quizplus · Accepted Answer

The shift from AS₁ to AS₂ represents an increase in the general price level, as indicated by the upward shift in the aggregate supply curve. This type of shift is consistent with cost-push inflation, which occurred in the mid-1970s due to rising energy prices and other supply shocks that pushed up production costs and reduced aggregate supply.

Refer to the Graph Above