If an economy is at full employment equilibrium, which of the following would lead to stagflation?
A. a leftward shift of the aggregate demand curve only
B. a leftward shift of the short-run aggregate supply curve only
C. a rightward shift of the short-run aggregate supply curve only
D. a rightward shift in both the short-run aggregate supply curve and the aggregate demand curve
Answer:A
If an economy is at full employment equilibrium, which of the following would lead to stagflation?
A. a leftward shift of the aggregate demand curve only B. a leftward shift of the short-run aggregate supply curve only C. a rightward shift of the short-run aggregate supply curve only D. a rightward shift in both the short-run aggregate supply curve and the aggregate demand curve