As expected inflation increases for the coming year,we expected the price of gold to ________ due to a rightward shift the in ________ curve.
A) increase; demand
B) increase; supply
C) decrease; demand
D) decrease; supply

Question

Quizplus · Accepted Answer

As inflation increases, people tend to buy more gold as a hedge against inflation, which leads to an increase in demand for gold. This causes a rightward shift in the demand curve, leading to an increase in the price of gold. Therefore, the correct choice is A, as the price of gold is expected to increase due to a rightward shift in the demand curve.

As Expected Inflation Increases for the Coming Year,we Expected the Price