If higher inflation is expected in the future, then the
A) AD curve shifts rightward.
B) SAS curve shifts rightward.
C) LAS curve shifts rightward.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Higher expected inflation leads to an increase in demand for goods and services in the short run, as people are incentivized to spend their money before it loses value. This shift in demand causes the AD curve to shift rightward.

If Higher Inflation Is Expected in the Future, Then the