During a period when total spending is too high relative to potential output,the economy experiences
A) excessive unemployment.
B) falling average prices.
C) a glut.
D) a Great Crash.
E) inflation.

Question

Quizplus · Accepted Answer

When total spending is too high relative to potential output, demand for goods and services will exceed supply, leading to upward pressure on prices. This situation is known as inflation.

During a Period When Total Spending Is Too High Relative