When the aggregate demand curve shifts ________ than the long-run aggregate supply shifts rightward, the result will be inflation.
A)rightward at a slower rate
B)leftward at a slower rate
C)rightward at a faster rate
D)leftward at the same rate

Question

Quizplus · Accepted Answer

If aggregate demand shifts rightward at a faster rate than long-run aggregate supply, then the demand for goods and services will exceed the economy's capacity to produce them in the long run. This creates upward pressure on prices in the economy, leading to inflation. Therefore, choice C is the best answer.

When the Aggregate Demand Curve Shifts ________ Than the Long-Run