Question
When the price level rises because the AD curve shifts rightward, the economy experiences which of the following?
Multiple choice question.
Cost-caused recession
Demand-caused recession
Cost-push inflation
Demand-pull inflation
Multiple choice question.
Cost-caused recession
Demand-caused recession
Cost-push inflation
Demand-pull inflation
Answers
GPT-4o mini
When the price level rises because the Aggregate Demand (AD) curve shifts rightward, the economy experiences **demand-pull inflation**.
This type of inflation occurs when an increase in aggregate demand outpaces aggregate supply, leading to higher prices.
This type of inflation occurs when an increase in aggregate demand outpaces aggregate supply, leading to higher prices.