Inﬂation in the U.S. economy tends to be
A) a ﬁnite, one-time event resulting from a shock.
B) ongoing, as increases in aggregate demand generally exceed the increases in aggregate supply.
C) a ﬁnite, one-time event, as the Fed actively works to eliminate all inﬂation.
D) ongoing, as aggregate supply is continually shifting to the left.

Question

Quizplus · Accepted Answer

Inflation in the U.S. economy tends to be ongoing, as increases in aggregate demand generally exceed the increases in aggregate supply. This means that there is consistently more demand for goods and services than the economy can supply, leading to a general rise in prices over time. While the Fed may take steps to manage inflation, such as adjusting interest rates or monetary policy, it is difficult to entirely eliminate inflation from the economy.

Inﬂation in the U.S. Economy Tends to Be