Question: Question 4 Using aggregate supply and demandcurves illustratethe different effectson outputof demand-pull and cost-pushinflation. (5marks) Show usingan aggregate supply and demandcurvediagram, how an initial increase

Question 4

  1. Using aggregate supply and demandcurves illustratethe different effectson outputof demand-pull and cost-pushinflation. (5marks)
  2. Show usingan aggregate supply and demandcurvediagram, how an initial increase in aggregate demand though monetary policymayhaveno effect on outputif workerswith "rationalexpectations" seekwage risesto compensateforthe expectedhigher price level.(5marks)

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