Changes in aggregate demand can cause inflation to rise above or fall below the expected rate of inflation.

Name: Changes in aggregate demand can cause inflation to rise above or fall below the expected rate of inflation.
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Question

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Increases in aggregate demand can cause an increase in overall prices, leading to inflation that is higher than expected. Conversely, decreases in aggregate demand can cause a decrease in prices, leading to lower inflation than expected.

Changes in Aggregate Demand Can Cause Inflation to Rise Above