An increase in expected inflation will cause the economy's short-run aggregate supply curve to:

Name: An increase in expected inflation will cause the economy's short-run aggregate supply curve to:
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An increase in expected inflation will lead to an increase in nominal wages as workers anticipate the rise in prices. This increase in wages will lead to an increase in production costs, causing the short-run aggregate supply curve to shift inward.

An Increase in Expected Inflation Will Cause the Economy's Short-Run