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

Question

Quizplus · Accepted Answer

If aggregate supply is vertical, it means that the economy has reached its full capacity and cannot produce any more output. In this case, a shift in aggregate demand will only lead to an increase in the price level and no change in output.

A Rightward Shift in Aggregate Demand Will Cause an Increase