If a country is experiencing high inflation, other things equal, the expectations of worsening inflation in the future would probably:
A)shift the AD curve to the left.
B)shift the AD curve to the right.
C)make the AD curve flatter.
D)make the AD curve steeper.

Question

Quizplus · Accepted Answer

Expectations of worsening inflation in the future can lead to increased current spending by consumers and businesses in anticipation of higher prices later, which shifts the Aggregate Demand (AD) curve to the right as demand for goods and services increases now to avoid higher costs later.

If a Country Is Experiencing High Inflation, Other Things Equal