Choice "D" is correct. Both an increase in aggregate demand and a decrease in aggregate supply can cause inflation.
Choice "a" is incorrect. While an increase in aggregate demand can cause inflation, it is not the only cause of inflation.
Choice "b" is incorrect. An increase in aggregate supply would lower the overall price level, not increase the overall price level.
Choice "c" is incorrect. A decrease in aggregate demand and an increase in aggregate supply would lower the overall price level, not increase the overall price level.
