Cost-Push Inflation Can Be Shown on an Aggregate Supply Aggregate

question 151

Multiple Choice

Cost-push inflation can be shown on an aggregate supply aggregate demand diagram as

• A) a rightward shift of the aggregate supply curve with no change in aggregate demand.
• B) a rightward shift in the aggregate demand curve with no change in aggregate supply.
• C) a leftward shift in the aggregate demand curve with no change in aggregate supply.
• D) a leftward shift in the aggregate supply curve with no change in aggregate demand.

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Definitions:

Annual Profit

The total earnings a company makes in one fiscal year after all expenses and taxes have been subtracted from its total revenue.

Nash Equilibrium

A concept within game theory where each player's strategy is optimal when considering the decisions of other players, leading to a situation where no participant can gain by unilaterally changing their strategy.

Duopolists

Two firms or parties that dominate the market for a particular product or service.

Output Maximization

Output maximization refers to a strategy employed by firms to adjust their production in order to produce the maximum number of goods or services, given their resources.