Question: Explain whether you agree with the following statement: The dynamic aggregate demand and aggregate supply model predicts that a recession caused by a decline in

Explain whether you agree with the following statement:
The dynamic aggregate demand and aggregate supply model predicts that a recession caused by a decline in AD will cause the inflation rate to fall. I know that the 2007-2009 recession was caused by a fall in AD, but the inflation rate was not lower as a result of the recession. The prices of most products were definitely higher in 2008 than they were in 2007, so the inflation rate could not have fallen.

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