Which of the following would cause inﬂation to fall but national output to rise?
A) An increase in aggregate demand.
B) A decrease in consumption.
C) A relatively higher increase in wages than the rate of inﬂation.
D) An increase in aggregate supply.

Question

Quizplus · Accepted Answer

An increase in aggregate supply would lead to a fall in inflation because more goods and services are available at lower prices, and it would also cause national output to rise because the economy is producing more.

Which of the Following Would Cause Inﬂation to Fall but National