The dynamic aggregate demand curve illustrates that the relationship between inflation and real output is:
A) direct.
B) inverse.
C) independent.
D) undefined.

Question

Quizplus · Accepted Answer

The dynamic aggregate demand curve shows an inverse relationship between inflation and real output. As inflation increases, the demand for goods and services decreases, leading to a decrease in real output. On the other hand, as inflation decreases, the demand for goods and services increases, leading to an increase in real output. Therefore, the correct response is B.

The Dynamic Aggregate Demand Curve Illustrates That the Relationship Between