As the aggregate demand curve shifts rightward along a given aggregate supply curve,
A)unemployment and inflation are higher.
B)unemployment and inflation are lower.
C)unemployment is higher and inflation is lower.
D)unemployment is lower and inflation is higher.

Question

Quizplus · Accepted Answer

As the aggregate demand curve shifts rightward, there is an increase in the overall demand for goods and services in the economy, which leads to firms producing more and hiring more workers. This results in lower unemployment. However, as demand exceeds supply, prices will rise, leading to inflation. Thus, unemployment is lower but inflation is higher.

As the Aggregate Demand Curve Shifts Rightward Along a Given