rate of inflation % 10 8- 6- 4 2- 0- 2018 2019 2020 2021 year The diagram above shows a country's annual rate of inflation over three years. Which of the combinations below is a feasible narrative for the effects you see over the three year period? Effect AD/AS A The cost of living fell AD was shifting left faster than AS B The price level rose AD was shifting right faster than AS C The value of money rose AS was shifting right faster than AD The consumer price index D AD was shifting left faster than AS rose
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The rate of inflation is decreasing over the three-year period (10% in 2018, 8% in 2019, and 6% in 2020). This means that the price level is rising at a slower rate each year. Show more…
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