Question
Economic growth is usually coupled with
Answer: Option C
Answer: (c)
With the increase in GDP, aggregate demand increases, because more production means people have more disposable income, which means more consumer spending.
As a result, prices rise in response, and in conclusion, because aggregate demand grows faster than long-term aggregate supply, economic growth will be coupled with inflation.
Hyperinflation - In economics, hyperinflation occurs when a country experiences very high and usually actuarially rates of inflation. Economic growth is usually coupled with inflation.
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Answer: (c)
With the increase in GDP, aggregate demand increases, because more production means people have more disposable income, which means more consumer spending.
As a result, prices rise in response, and in conclusion, because aggregate demand grows faster than long-term aggregate supply, economic growth will be coupled with inflation.
Hyperinflation - In economics, hyperinflation occurs when a country experiences very high and usually actuarially rates of inflation. Economic growth is usually coupled with inflation.
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