Econ - expected inflation and shift in AD and AS expected, following, understand, one

manchester88

Hi,

during one reading, I read the following in the section that talks about "when inflation is not anticipated":

- aggregate demand moves to the right (rises) in line with actual inflation
- aggregate supply moves to the left (falls) in line with expected inflation

Can someone helps me understand the above ? why in one case it's "actual" and the other case it's "expected" ?

Tks

JGovender

reference? where is this coming from?



Edited 1 time(s). Last edit at Tuesday, November 30, 2010 at 12:53AM by BayStreet.

smartpants

Which reading??

Micholien

C+I+G+NX goes up with actual, not expected

MythosHF

Sorry my mistake

It's from ElanGuides 2011 , reading 25 : U.S. INFLATION, UNEMPLOYMENT, AND BUSINESS CYCLES