A change in the rate of inflation causes a movement along the AD curve.

Name: A change in the rate of inflation causes a movement along the AD curve.
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Question

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A change in the rate of inflation affects the purchasing power of consumers and businesses, which in turn affects their demand for goods and services. This results in a movement along the AD curve, as the price level and output level adjust to the new level of inflation.

A Change in the Rate of Inflation Causes a Movement