Question

Inflationary pressure in the AS-AD model can be shown as a

Demand shock that shifts the AD to the left.
rise in input prices affecting most firms across the economy shifting AS curve to the right.
rise in input prices affecting most firms across the economy shifting AS curve to the left.

Answer 1

Answer: rise in input prices affecting most firms across the economy shifting AS curve to the left

Step-by-step explanation:

Inflationary pressures simply refers to the pressure on both the demand and the supply-side which can bring about an increase in the general price level of goods and services in such economy.

Inflationary pressure in the AS-AD model can be shown as a rise in input prices affecting most firms across the economy shifting AS curve to the left. The aggregate supply curve shifting to the left implies that there'll be a reduction in the goods and services demanded in the economy due to the increase in price.