If households and firms expect higher rates of inflation, the ________ curve will shift ________.
A)AD; rightward
B)SRAS; upward
C)SRAS; downward
D)AD; until it becomes vertical

Name: If households and firms expect higher rates of inflation, the ________ curve will shift ________. A)AD; rightward B)SRAS; upward C)SRAS; downward D)AD; until it becomes vertical
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Question

Quizplus · Accepted Answer

Aggregate supply curves are built on inflationary expectations. When firms anticipate higher rates of inflation the SRAS curve shifts upward.

If Households and Firms Expect Higher Rates of Inflation, the ________