The dynamic aggregate demand curve will shift if any of the following changes except the:
A) current inflation rate
B) inflation target.
C) natural level of output.
D) demand shock.

Question

Quizplus · Accepted Answer

The dynamic aggregate demand curve will shift in response to changes in inflation expectations, changes in the natural rate of output, and demand shocks. However, the current inflation rate itself does not shift the dynamic aggregate demand curve, as it is already reflected in the inflation expectations of consumers and firms.

The Dynamic Aggregate Demand Curve Will Shift If Any of the Following