Potential GDP increased from 4.7 trillion to 16.6 trillion between 1970 and 2013 resulting in economic growth.Also,during this time ________ occurred because ________.
A)inflation;aggregate demand decreased by more than potential GDP
B)stagflation;aggregate demand increased by more than potential GDP
C)deflation;aggregate demand increased by more than potential GDP
D)inflation;aggregate demand increased by more than potential GDP
E)inflation;aggregate demand increased by less than potential GDP

Question

Quizplus · Accepted Answer

As potential GDP increased from 4.7 trillion to 16.6 trillion between 1970 and 2013 resulting in economic growth, inflation occurred because aggregate demand increased by more than potential GDP.

Potential GDP Increased from 4