Consider the Basic AD/AS Macro Model

question 87

Multiple Choice

Consider the basic AD/AS macro model. A rise in an input price like the price of oil would be expected to cause a new macroeconomic equilibrium in which the price level

• A)and real GDP are lower than in the initial equilibrium.
• B)is lower and real GDP higher than in the initial equilibrium.
• C)is higher and real GDP lower than in the initial equilibrium.
• D)is higher and real GDP remained the same as in the initial equilibrium.
• E)and real GDP are higher than in the initial equilibrium.