Figure 5-2

In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will
A) experience inflation.
B) see a sustained decrease in the price level.
C) experience a significant decrease in unemployment.
D) experience economic recession.

Question

Figure 5-2

In Figure 5-2, if the aggregate demand curve shifts outward over time, the economy will
A) experience inflation. 
B) see a sustained decrease in the price level. 
C) experience a significant decrease in unemployment. 
D) experience economic recession.

Quizplus · Accepted Answer

An outward shift in the aggregate demand curve indicates an increase in spending in the economy, which leads to higher prices and inflation.

Figure 5-2 In Figure 5-2, If the Aggregate Demand Curve Shifts Outward