If people start to expect higher inflation in the future, current spending will _____ because people will:
A) rise; try to buy before prices increase.
B) rise; pay higher current prices.
C) fall; save money to cover higher future costs.
D) fall; be afraid to spend.

Question

Quizplus · Accepted Answer

Expectations of higher inflation in the future can lead people to spend more currently to avoid higher prices later, hence option A is correct.

If People Start to Expect Higher Inflation in the Future