Question

Complete the sentences with the correct terms.

Demand–pull inflation occurs when ______1________ increases until equilibrium output exceeds the full employment level. For instance, this can be caused by an increase in ______2________. Temporarily, both aggregate output and _______3_______ increase, as resources are beyond capacity. Eventually, the economy returns to long‑run equilibrium when _______4_______ decreases until it and aggregate demand intersect at the same point on the _______5_______ curve. Finally, _______6_______ returns to its full-employment level, and _______7_______ again increases.

WORD BANK
- aggregate demand
- long-run aggregate supply
- short-run aggregate supply
- consumer spending
- the aggregate price level
- aggregate output

Answer 1

The word to complete the sentence are:

• Aggregate demand
• Long-run aggregate supply
• Short-run aggregate supply
• Consumer spending
• The aggregate
• The price level
• Aggregate output.

What is a Sentence?

A sentence is a set of words that complete itself. They contain a subject and a predicate and convey a statement.

Demand-pull inflation occurs when Aggregate Demand increases until equilibrium output exceeds the full employment level. For instance, this can be caused by an increase in Long-run Aggregate supply. Temporarily, both aggregate output and Short-run aggregate supply increases as resources are beyond capacity. Eventually, the economy returns to long-run equilibrium when Consumer spending decreases until it and aggregate demand intersects at the same point on the aggregate curve. Finally, the price level returns to its full employment level and aggregate output again increases.

Learn more about a Sentence here:

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