Refer to the Graph Above

question 55

Multiple Choice

Refer to the graph above. Suppose that the economy is at an initial equilibrium where the AD₁ and AS₁ curves intersect. Demand-pull inflation in the long run can best be illustrated as a shift of:

• A) AS₁ to AS₂, and back again to AS₁
• B) AD₁ to AD₂, and back again to AD₁
• C) AS₁ to AS₂, consequently making AD₁ shift to AD₂
• D) AD₁ to AD₂, consequently making AS₁ shift to AS₂

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Penalties imposed for violating laws or regulations, which can include fines, imprisonment, or other forms of punishment.

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