If aggregate demand increases while aggregate supply remains constant, what is the likely outcome for the economy?

When aggregate demand increases and aggregate supply stays the same, it usually leads to higher prices in the economy, a situation known as inflation. This happens because more people want to buy goods and services, but the amount available hasn't changed, so businesses can charge more. For example, if many people suddenly want to buy a popular toy, but there are only a limited number of toys available, the price will go up. As prices rise, consumers may buy less, which can slow down economic growth if it continues. Therefore, while increased demand can boost the economy initially, it can also lead to inflation if supply doesn’t catch up.