Stimulating aggregate demand to reduce unemployment will aggravate inflation.

Name: Stimulating aggregate demand to reduce unemployment will aggravate inflation.
Brand: Quizplus
Rating: 4.7 (38 reviews)

Question

Quizplus · Accepted Answer

This is because stimulating aggregate demand (i.e. increasing spending, lowering interest rates) will likely lead to an increase in demand for goods and services. If the supply of these goods and services cannot keep up with demand, prices will rise, leading to inflation.

Stimulating Aggregate Demand to Reduce Unemployment Will Aggravate Inflation