Politicians may accept moderate inflation in an election year, since the _____ in aggregate _____ serves to _____.
A) increase; supply; increase output
B) decrease; supply; decrease employment
C) decrease; demand; decrease output
D) increase; demand; increase output

Question

Quizplus · Accepted Answer

Politicians may accept moderate inflation in an election year because an increase in aggregate demand typically leads to an increase in output. This is because higher demand for goods and services can encourage businesses to produce more, potentially leading to economic growth and possibly lower unemployment rates, which can be favorable for politicians seeking re-election.

Politicians May Accept Moderate Inflation in an Election Year, Since