A rightward shift in aggregate demand will cause an increase in output and no change in the price level if aggregate supply is
A)Upward-sloping to the right.
B)Vertical.
C)Downward-sloping to the right.
D)Horizontal.

Question

Quizplus · Accepted Answer

When aggregate supply is horizontal, it indicates that the economy can increase output without changing the price level, which aligns with the effects of a rightward shift in aggregate demand increasing output without affecting prices.

A Rightward Shift in Aggregate Demand Will Cause an Increase