Increase in expected inflation shifts:

A leftward shift in Aggregate Demand (AD) implies a decrease in total demand for goods and services within the economy. However, an increase in expected inflation generally does not lead to a reduction in demand; rather, it may encourage consumers to purchase sooner, anticipating higher prices, thus not supporting the leftward shift of AD.

The Phillips curve illustrates the inverse relationship between inflation and unemployment. An increase in expected inflation does not directly shift the Phillips curve left; rather, it may lead to a movement along the curve as inflation expectations adjust. Thus, the choice stating a leftward shift of the Phillips curve is misleading in this context.

An increase in expected inflation typically leads to higher nominal interest rates, as lenders demand compensation for the decreased purchasing power of future repayments. Therefore, the assertion that nominal rates would decrease is incorrect and contrary to the expected economic behavior.