Refer to the Diagram and Assume That Prices and Wages

question 228

Multiple Choice

Refer to the diagram and assume that prices and wages are flexible both upward and downward in the economy. In the extended AD-AS model,

• A) demand-pull inflation would involve a rightward shift of curve A, followed by a rightward shift of curve C.
• B) cost-push inflation would involve a rightward shift of curve A, followed by a leftward shift of curve C.
• C) recession would involve a leftward shift of curve A, followed by a rightward shift of curve C.
• D) recession would involve a rightward shift of curve D, followed by leftward shifts of curves A and C.

---

Definitions:

Customer-oriented Layout

is a design strategy for facilities that arranges resources to best serve the customer, usually aiming to enhance the customer's experience and streamline service or product delivery.

Airplane Manufacturers

Companies that specialize in designing, building, and selling aircraft for civilian and military use.

Long-term Contractual

Agreements or obligations that extend over a lengthy period, typically involving ongoing services or commitments.