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I NEED HELP URGENTLY PLEASE

If the real wealth of a nation decreases due to unexpected inflation, the AD line will move which direction?

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User Kenske
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If the real wealth of a nation decreases due to unexpected inflation, the AD (Aggregate Demand) line will shift to the left.
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User Stuart Herring
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If the real wealth of a nation decreases due to unexpected inflation, the aggregate demand (AD) line will move to the left (decrease). This is because inflation reduces the purchasing power of consumers, making them less able to buy goods and services at the same price level. As a result, businesses will receive fewer orders, which will lead to a decrease in production and a decrease in overall demand. This shift will be reflected in a decrease in the level of real GDP and a higher price level in the short run. In the long run, prices and wages will adjust, leading to a decrease in the price level and a return to the original level of real GDP.

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User Jeffresc
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