An economy where the Central Bank overstimulates aggregate demand will suffer from
A) inflation.
B) unemployment.
C) increases in money supply.
D) deflation.

Question

Quizplus · Accepted Answer

When the Central Bank overstimulates aggregate demand, it leads to an increase in the demand for goods and services. If the supply of goods and services does not match up with the demand, prices will rise, leading to inflation.

An Economy Where the Central Bank Overstimulates Aggregate Demand Will