If the Fluctuations in the Economy's Real Growth Rate from Year

question 108

Multiple Choice

If the fluctuations in the economy's real growth rate from year to year are caused primarily by variations in the rate at which aggregate demand increases, then data would show the most rapid inflation occurs when

• A)unemployment is the highest, and the lowest inflation occurs when unemployment is the lowest.
• B)AS grows most rapidly, and the lowest inflation occurs when AS grows most slowly.
• C)AD rises most slowly, and the lowest inflation occurs when AD rises most rapidly.
• D)output grows most rapidly and the lowest inflation when output grows most slowly.

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