Final answer:
Cost-push inflation arises when a supply shock reduces aggregate supply, causing prices to rise due to higher production costs, not increased demand. A price ceiling, set below equilibrium price, does not shift the demand or supply but causes shortages. Similarly, in financial markets, a rise in the supply of funds will lead to a decline in interest rates.
Step-by-step explanation:
Inflation occurs when a supply shock reduces aggregate supply and is typically called cost-push inflation. This type of inflation arises when there is a decrease in the quantity of goods or services available in an economy (which is the aggregate supply), such as what happens following a negative supply shock. For example, if there is an unexpected shortage of oil, the price of oil would increase because there is less supply available. This in turn would cause the costs of production to increase for many companies and industries, leading to higher prices for consumers. It is not caused by demand factors but by increases in the cost of production.
To answer the question provided with other examples: The correct answer to the question, "A price ceiling will usually shift:", is d. neither demand nor supply. A price ceiling is a government-imposed limit on how high a price can be charged for a product or service and primarily affects market outcomes by causing shortages when the ceiling is below the equilibrium price. Regulatory impacts like price ceilings don't shift the demand or supply curve themselves; instead, they result in less of the good being available than would be at equilibrium.
Concerning another question related to financial markets, a change that would lead to a decline in interest rates is c. a rise in supply of funds in the financial market. An increase in the supply of funds lowers the interest rate, all else being equal, because lenders will accept a lower return on their loanable funds due to the greater availability of funds to loan out.