If people correctly anticipate an increase in aggregate demand,a result is

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If people correctly anticipate an increase in aggregate demand, workers will demand higher money wages to keep the real wage unchanged. This is because as aggregate demand increases, firms will produce more and hire more workers, which will increase the demand for labor and ultimately push up wages. However, if workers do not anticipate the increase in aggregate demand, they may mistakenly think that their higher nominal wages reflect an increase in real wages, leading to an upward pressure on prices and potentially accelerating inflation.

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