Consider the Basic AD/AS Model

question 85

Multiple Choice

Consider the basic AD/AS model.A rise in an input price like the wage rate would be expected to create a new macroeconomic equilibrium,which in comparison to the original equilibrium,has a price level that is

• A)higher and a real GDP that is higher.
• B)higher and a real GDP that is lower.
• C)higher and a real GDP that is the same.
• D)lower and a real GDP that is higher.
• E)lower and a real GDP that is lower.