If people correctly anticipate an increase in aggregate demand, a result is
A) there are no predictable results associated with an anticipated increase in aggregate demand.
B) an increase in the real value of outstanding government debt.
C) a lower rate of inflation in the current time period.
D) workers demanding higher money wages to keep the real wage unchanged.

Question

Quizplus · Accepted Answer

If people correctly anticipate an increase in aggregate demand, workers may demand higher money wages to keep the real wage unchanged. This is because as demand for goods and services increases, employers may need to hire more workers or existing workers may work more hours, leading to a tighter labor market and increasing bargaining power for workers to demand higher wages.

If People Correctly Anticipate an Increase in Aggregate Demand, a Result