Question

What would happen to the South African inflation fate in future years if the $AD$ curve were to begin shifting rightward at a more rapid pace than the LRAS curve?

Short answer

Increasing anyof these components shifts the AD curve tothe correct,leading to a greater real GDP and to upward pressure onthe worth level.

Step-by-step solution

Given Information

The aggregate demand curve, or AD curve, shifts to the right because the components purchase, industry, public expenditure, and investment on minus the value importation all grow as money supply improves. As of these portions drop, its AD curve to shift back to the left.

Explanation

If the AD curve shifts tothe right, then the equilibrium quantity of output and also the indicant will rise. If the AD curve shifts to the left, then the equilibrium quantity of outputand so the index will fall.