Answer:
B) The interest rate rises causing a movement along a given aggregate-demand curve.
Explanation:
As the prices rise the cost of borrowing becomes higher as generally to combat inflation the interest rates are pushed higher to control excessive spending by the consumers brought about by borrowing. As the cost of borrowing is increased consumers are less likely to take out loans and spend causing further demand pull inflation.
There is also a movement along the demand curve as stated by the law of demand. this means an increase in price of a commodity will cause people to demand less of it as they may not be able to afford previous levels of purchase due to increased price. Whenever there is a change in price usually there is a movement along the curve and when there are factors other than the price changing, for example income, this is when there are shifts in the demand curve.
Hope that helps.
