-Refer to the above figure. If the aggregate demand curve shifts beyond AD₅, then the economy will experience A) demand-pull inflation. B) cost-push inflation. C) structural inflation. D) stagflation.

Question

Quizplus · Accepted Answer

When the aggregate demand curve shifts beyond AD5, it indicates an increase in overall demand, leading to demand-pull inflation, where prices rise due to higher demand in the economy.

-Refer to the Above Figure