An Increase in AD Will Trigger More Inflation Under Which

question 66

Multiple Choice

An increase in AD will trigger more inflation under which of the following conditions?

• A)AD is relatively steep.
• B)AD is relatively flat.
• C)AS is relatively steep.
• D)AS is relatively flat.

---

Definitions:

Output

The total amount of goods or services produced by a company, industry, or economy within a specific period.

Additional Unit

Referring to the next or extra unit of a product or service to be produced or consumed, often used in analyses of costs and benefits.

Perfectly Competitive

Describes a market situation where firms sell identical products, there are no barriers to entry or exit, and no single buyer or seller can influence the market price.

Excess Profits

Profits that exceed what is considered normal or expected, often due to favorable market conditions or monopoly power.