-An economy is in long- run equilibrium and the price level is 100 in the figure above. Aggregate demand increases and the aggregate demand curve shifts to AD1. If the increase in aggregate demand is expected, then the inflation rate is .
A)0 per cent a year
B)10 per cent a year
C)20 per cent a year
D)more than 20 per cent a year

Question

-An economy is in long- run equilibrium and the price level is 100 in the figure above. Aggregate demand increases and the aggregate demand curve shifts to AD1. If the increase in aggregate demand is expected, then the inflation rate is .
A)0 per cent a year 
B)10 per cent a year 
C)20 per cent a year 
D)more than 20 per cent a year

Quizplus · Accepted Answer

The Answer of 
-An economy is in long- run equilibrium and the price level is 100 in the figure above. Aggregate demand increases and the aggregate demand curve shifts to AD1. If the increase in aggregate demand is expected, then the inflation rate is .
A)0 per cent a year 
B)10 per cent a year 
C)20 per cent a year 
D)more than 20 per cent a year

-An Economy Is in Long- Run Equilibrium and the Price