In any economy functioning at potential GDP, there are occasions when the short-term aggregate supply curve unexpectedly shifts, causing inflationary pressures. Which of the following is considered to be a common cause of this type of shift?
A. overoptimistic lending by banks
B. sudden rise in input prices
C. a surge of export sales
D. a wave of government spending
Answer:B
In any economy functioning at potential GDP, there are occasions when the short-term aggregate supply curve unexpectedly shifts, causing inflationary pressures. Which of the following is considered to be a common cause of this type of shift?
A. overoptimistic lending by banks B. sudden rise in input prices C. a surge of export sales D. a wave of government spending
Explanation: Type: Multiple Choice