Demand-Pull Inflation Starts with a Shift of the

question 389

Multiple Choice

Demand-pull inflation starts with a shift of the

• A) SAS curve rightward.
• B) AD curve rightward.
• C) AD curve leftward.
• D) SAS curve leftward.

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Definitions:

Wage Rate

The fixed amount of compensation or payment given to an employee by an employer in exchange for work performed, typically expressed on an hourly, daily, or piecework basis.

Workers

Individuals engaged in any form of employment or activity to earn income through the provision of labor or services.

Substitution Effect

The economic principle stating that as the price of a good or service rises, individuals will replace more expensive items with less costly alternatives.

Output Effect

The impact that changes in output have on economic activity, such as variations in production levels affecting GDP.