Multiple choice question.
Waits for wages and other input costs to fall in order to get back to full employment
Causes shifts in aggregate supply to the right, not aggregate demand
Waits for wages and other input costs to rise in order to get back to full employment
Causes both shifts in aggregate supply and aggregate demand to the right
1 answer
When the government takes a hands-off approach to cost-push inflation, it does which of the following?
Waits for wages and other input costs to fall in order to get back to full employment.
This is the correct option, as a hands-off approach often involves allowing the market to self-correct by waiting for the natural adjustment of wages and input costs.
