In the First Half of 2008, Food and Energy Costs

Multiple Choice

In the first half of 2008, food and energy costs in the United States increased. At the same time, the financial crisis slowed production. As a result, economists warned that the economy would

A) experience stagflation.
B) see an increase in potential GDP.
C) see a decrease in aggregate demand and an increase in long- run aggregate supply.
D) suffer an inflationary gap.