A rightward shift in an aggregate demand curve will cause
A)No change in prices or output if the aggregate supply curve is upward-sloping.
B)Higher prices,but not higher output,if the aggregate supply curve is vertical.
C)Higher prices,but no change in output,if the aggregate supply curve is horizontal.
D)Higher output,but no change in prices,if the aggregate supply curve is vertical.

Question

Quizplus · Accepted Answer

A rightward shift in the aggregate demand curve indicates an increase in demand for goods and services. If the aggregate supply curve is vertical, it suggests that the economy is producing at its maximum capacity, so an increase in demand will only lead to higher prices and no increase in output. Therefore, the correct answer is B- higher prices, but not higher output, if the aggregate supply curve is vertical.

A Rightward Shift in an Aggregate Demand Curve Will Cause