Figure 8-5
-If the aggregate demand curve in Figure 8-5 is D₅,the economy will be experiencing
A)demand-pull inflation.
B)cost-push inflation.
C)structural inflation.
D)stagflation.

Question

Figure 8-5 
-If the aggregate demand curve in Figure 8-5 is D₅,the economy will be experiencing
A)demand-pull inflation. 
B)cost-push inflation. 
C)structural inflation. 
D)stagflation.

Quizplus · Accepted Answer

When aggregate demand is at D₅, the demand for goods and services is high, but the supply is limited, resulting in an increase in prices. This type of inflation, caused by increased demand, is known as demand-pull inflation.

Figure 8-5 -If the Aggregate Demand Curve in Figure 8-5 Is D₅,the