what-happens-when-aggregate-demand-shifts-more-than-short-run-aggregate-supply-i

Question

What happens when aggregate demand shifts more than short-run aggregate supply in the dynamic AD-AS model?

Accepted Answer

Inflation occurs due to increased price levels.

Answer

Deflation occurs due to decreased price levels.

Answer

Stagflation occurs due to stagnant economic growth.

Answer

Economic equilibrium is achieved with stable price levels.