An increase in aggregate demand will tend to cause which of the following?
A) a deflationary gap
B) a recessionary gap
C) cost-push inflation
D) none of the above

Question

Quizplus · Accepted Answer

An increase in aggregate demand typically leads to demand-pull inflation, not a deflationary gap, a recessionary gap, or cost-push inflation. These other options are associated with different economic conditions.

An Increase in Aggregate Demand Will Tend to Cause Which