Question

IE 4-3....Suppose that a Demand shift (an increase in optimism) moves this economy to Point E with an Employment of 122 million people. Households in the Circular Flow will be earning a Nominal Income of _________ billion and there will be an equilibrium at Point S in the PPF. This is a(n) _____________ situation..

Answer 1

$6240

Demand Inflation

Step-by-step explanation:

Demand inflation also known as Demand-pull Inflation is an economic condition whereby there is an increase in price due to aggregate demand exceeding the aggregate supply of goods and services. This is when there is excess amount of money in the system and there are fewer goods and services. This leads to inflation.