Inflation will
A)increase aggregate demand.
B)increase the quantity of real GDP demanded.
C)decrease aggregate demand.
D)decrease the quantity of real GDP demanded.
E)increase aggregate supply.

Question

Quizplus · Accepted Answer

Inflation causes the prices of goods and services to rise, which reduces the purchasing power of consumers. As a result, consumers demand less quantity of goods and services, leading to a decrease in the quantity of real GDP demanded.

Inflation Will