If spending in an economy increases by 3% and real GDP increases by 1%,the result will be:
A) a recession.
B) inflation.
C) a positive supply shock.
D) war.

Question

Quizplus · Accepted Answer

When spending in an economy increases by 3% and real GDP increases by 1%, it indicates an increase in demand for goods and services that exceeds the economy's capacity to produce them, leading to an increase in prices (inflation). This scenario is commonly referred to as demand-pull inflation.

If Spending in an Economy Increases by 3% and Real