Question

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

Answer 1

Answer:

A. increases if the expected inflation rate increases.

Explanation:

if it is expected that inflation would increase, consumers would want to buy goods at a cheaper rate, thus, they would increase demand now and a result aggregate demand would rise.

for example, if the price of bread is $10 dollars now and it is expected that price would increase to $12 next month. the demand for bread would increase now