If aggregate demand grows only slightly faster than potential GDP, then the economy will ________.
A)be at a business- cycle peak
B)experience economic growth with low inflation
C)experience economic growth with high inflation
D)experience recession

Question

Quizplus · Accepted Answer

When aggregate demand grows slightly faster than potential GDP, it leads to economic growth with low inflation, as the demand increase is not excessive enough to cause high inflation.

If Aggregate Demand Grows Only Slightly Faster Than Potential GDP