Assume That the Aggregate Demand Increases While the Short-Run Aggregate

question 102

Multiple Choice

Assume that the aggregate demand increases while the short-run aggregate supply decreases.The result is a(n) :

• A)increase in both equilibrium real GDP and the price level.
• B)decrease in equilibrium real GDP and an increase in the price level.
• C)decrease in both equilibrium real GDP and the price level.
• D)decrease in equilibrium real GDP, while the price level remains fixed.
• E)increase in the price level, while the change in equilibrium real GDP is ambiguous.