In the dynamic aggregated demand and aggregate supply model,inflation occurs if
A)AD shifts faster than SRAS.
B)AD shifts slower than SRAS.
C)SRAS shifts faster than AD.
D)LRAS shifts faster than AD.

Question

Quizplus · Accepted Answer

Inflation occurs when aggregate demand (AD) increases faster than short-run aggregate supply (SRAS), leading to higher prices as demand outpaces supply.

In the Dynamic Aggregated Demand and Aggregate Supply Model,inflation Occurs