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The coronavirus pandemic contributed to inflation in the U.S. economy because it caused O an increase in aggregate demand an increase in aggregate supply a decrease in aggregate demand a decrease in aggregate supply

The coronavirus pandemic contributed to inflation in the U.S. economy because it caused O an increase in aggregate demand an increase in aggregate supply a decrease in aggregate demand a decrease in aggregate supply

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The coronavirus pandemic contributed to inflation in the U.S. economy because it caused an increase in aggregate demand an increase in aggregate supply a decrease in aggregate demand a decrease in aggregate supply
Transcribed Image Text:The coronavirus pandemic contributed to inflation in the U.S. economy because it caused an increase in aggregate demand an increase in aggregate supply a decrease in aggregate demand a decrease in aggregate supply
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The corona virus pandemic resulted in severe lock downs in the major as well as developing economies. The businesses were not able to freely trade with each other due to strict conditions by the government and were forced to fulfill  domestic needs first.   This resulted in world supply chains to break and the cost of movement of goods and services to rise in the world market. This makes the Aggregate supply to decrease, making rise to prices in the market whereas quantity of output falls.

 

 

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