Suppose the Full-Employment Level of Real Output (Q)for a Hypothetical

question 202

Multiple Choice

Suppose the full-employment level of real output (Q) for a hypothetical economy is $500 and that the price level (P) initially is 100.Use the following short-run aggregate supply schedules to answer the next question.

-Refer to the information above.If the price level unexpectedly increases from 100 to 125,the level of real output in the short run will:

• A) rise from $500 to $560.
• B) fall from $500 to $440.
• C) fall from $560 to $500.
• D) rise from $440 to $500.