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

Question

Quizplus · Accepted Answer

When people anticipate an increase in aggregate demand, they expect higher prices, leading workers to demand higher money wages to maintain their real wage levels.

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