If AD and AS increase at exactly the same rate, the result will be
A)demand-side inflation.
B)supply-side inflation.
C)falling prices.
D)stable prices.

Question

Quizplus · Accepted Answer

When both AD and AS increase at the same rate, there is no change in the equilibrium price level. The increase in demand is matched by an increase in supply, leading to stable prices. Therefore, the correct option is stable prices.

If AD and AS Increase at Exactly the Same Rate