Suppose the equilibrium aggregate price level and the equilibrium level of real GDP are both rising. This is probably the effect of a(n) _____ in aggregate _____.
A) increase; supply
B) increase; demand
C) decrease; supply
D) decrease; demand

Question

Quizplus · Accepted Answer

When both the equilibrium aggregate price level and the equilibrium level of real GDP are rising, it means that there is an increase in aggregate demand, which shifts the aggregate demand curve to the right. This results in an increase in both the price level and real GDP.

Suppose the Equilibrium Aggregate Price Level and the Equilibrium Level