On the aggregate demand curve, if the rate of inflation rises, short-term output will rise as the curve shifts right.

Name: On the aggregate demand curve, if the rate of inflation rises, short-term output will rise as the curve shifts right.
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Question

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On the aggregate demand curve, a higher rate of inflation will cause a leftward shift of the curve, as it implies a decrease in real purchasing power and a reduction in demand for goods and services. This would lead to a decrease in short-term output, not a rise.

On the Aggregate Demand Curve, If the Rate of Inflation