If Demand-Pull Inflation Occurs When the Economy Is Already at Potential

Multiple Choice

If demand-pull inflation occurs when the economy is already at potential GDP then, following the initial increase in aggregate demand, the

A) potential GDP line shifts leftward.
B) AS curve shifts leftward.
C) AS curve shifts rightward.
D) potential GDP line shifts rightward.
E) None of the above is correct because demand-pull inflation shifts only the aggregate demand curve.