QUESTION $25$

Assume that demand pull inflation occurs within the U$.$S$.$ In this situation, what changes are we most likely to observe:

a$.$ we will observe stagflation

b$.$ we would observe decreases in both national output and unemployment

c$.$ the price level will increase, but national output will remain constant

d$.$ the price level will increase, which leads to a decrease in aggregate demand

e$.$ although the price level is increasing, we would observe decreasing unemployment