Which of the following will reduce inflation and also reduce the level of output,ceteris paribus?
A) A leftward shift of the aggregate supply curve.
B) A rightward shift of the aggregate supply curve.
C) A leftward shift of the aggregate demand curve.
D) A rightward shift of the aggregate demand curve.

Question

Quizplus · Accepted Answer

A leftward shift of the aggregate demand curve will reduce inflation by decreasing the overall demand for goods and services, which puts downward pressure on prices. At the same time, it will reduce the level of output because there is less demand for goods and services, leading to a decrease in production.

Which of the Following Will Reduce Inflation and Also Reduce