If Demand Pull Inflation Occurs When the Economy Is Already

question 4

Multiple Choice

If demand pull inflation occurs when the economy is already at potential GDP,then following the initial increase in aggregate demand,the

• A)AS curve shifts rightward.
• B)potential GDP line shifts rightward.
• C)AS curve shifts leftward.
• D)potential GDP line shifts leftward.
• E)None of the above is correct because demand-pull inflation shifts only the aggregate demand curve.

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