dynamic aggregate demand and aggregate

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Explain whether you agree with the following statement: The dynamic aggregate demand and aggregate

supply model predicts that a recession caused by a decline in AD will cause the inflation rate to fall. I know that the 2007–2009 recession was caused by a fall in AD, but the inflation rate was not lower as a result of the recession. The prices of most products were definitely higher in 2008 than they were in 2007, so the

inflation rate could not have fallen.

    • 10 years ago
    dynamic aggregate demand and aggregate
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