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NEW QUESTION: 1
Which of the following will cause an increase in aggregate demand in the United States?
A. An increase in the expected rate of inflation.
B. An increase in the pessimism of business and consumers about future economic conditions.
C. An increase in the real interest rate, or a decrease in the stock market share prices.
People will buy now before prices go higher. Thus the expectation of an increase in the inflation rate will stimulate current aggregate demand.