a) Demand-Pull Inflation d) Long-run 81. b) Cost-Push Inflatione) Short-run Aggr
ID: 1125411 • Letter: A
Question
a) Demand-Pull Inflation d) Long-run 81. b) Cost-Push Inflatione) Short-run Aggregate Supply e) Immediate-short-run Aggregate Supply Aggregate Supply Ihe aggregate supply curve associated with a time period in which input prices (especially nominal aggregate supply curve relevant to a time period in which there are some changes in the overall price level, but input prices (particularly nominal wages) have not changed. 82. An Inflation resulting from higher costs of inputs, for example, higher wage rates or higher raw material prices. 83. An aggregate supply curve for which real output, but not the price level, changes when the aggregate demand curve shifts; a horizontal curve that implies an inflexible price level. 84. Increases in the price level resulting from an increase in aggregate demand at or near the full employment level. 85.Explanation / Answer
81. Long run aggregate supply.
Long run is a time frame where there can be full response from all the variables, may it be price or wage.
82. Short run aggregate supply.
In the short run, the wages immediately do not change frequently. Workers take time to infer the market scenario and then negotiate for wages accordingly.
83. Cost push inflation.
This refers to inflation which is caused due to increased input cost which increases the overall cost of production and higher price level in the economy.
84. Immediate short run.
There is no time for even the price level to change.
85. Demand pull inflation.
Inflation cause due to increased demand which is not meet by increased supply, rising the prices up leading to inflation.
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