If the Aggregate Supply Curve Shifts Leftward

question 87

Multiple Choice

If the aggregate supply curve shifts leftward,

• A)the price level increases and output increases
• B)the resulting increase in the price level is usually called cost-push inflation
• C)the resulting increase in the price level is usually called demand-pull inflation
• D)the price level increases only if there is also a rightward shift of the aggregate demand curve
• E)the price level decreases and output increases

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Definitions:

Interdependence

Interdependence is a condition where entities are mutually reliant on each other, implying that actions of one can significantly impact the others.

Businesses

Economic entities (firms) that purchase resources and provide goods and services to the economy.

Product Markets

Markets where goods and services are bought and sold, connecting buyers and sellers.

Households

Economic units consisting of all individuals living in a single residence, making decisions about consumption, savings, and investment.