- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 10. Aggregate Output, Prices, and Economic Growth
- Subject 5. Shifts in Aggregate Demand and Supply
CFA Practice Question
Changes in the expected inflation rate will affect ______.
II. short-run aggregate supply
III. long-run aggregate supply
I. aggregate demand
II. short-run aggregate supply
III. long-run aggregate supply
A. I and II
B. I and III
C. I, II, and III
Explanation: Expectations do not change LRAS, since it is determined by technology, resource base, and institutional factors.
User Contributed Comments 3
| User | Comment |
|---|---|
| truegazzi | And what about producers? Wouldn't they sell less in present for more sales in future? |
| kocas | yes truegazzi, and that is precisely what short run aggregate supply means. |
| gazman1984 | What on earth are 'Institutional factors'? |