Aggregate demand
A)decreases if expected future income rises.
B)increases if the exchange rate rises.
C)increases if government expenditures decrease.
D)increases if the expected inflation rate increases.
E)increases if aggregate supply increases.

Question

Quizplus · Accepted Answer

If the expected inflation rate increases, consumers and businesses are likely to spend more now to avoid higher prices in the future, thus increasing aggregate demand.

Aggregate Demand