Explain whether you agree with the following statement:

"The dynamicaggregate demand and aggregate supply model predicts that a recession caused by a decline in AD will cause the inflation rate to fall. $1$ know that the $2007-2009$ recession was caused by a fall in $AD,$ but the inflation rate was not lower after 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."

A$.$ The statement is wrong because $AD$ must have increased if prices were higher

B$.$ The statement is wrong because there must have been a supply shock if prices rose and there was a recession.

C$.$ The statement is wronghecause it is confusing the price level with the inflation rate.

D$.$ The statement is correct as prices rose in $2008.$