Which of the following results if at a particular price level,the aggregate quantity supplied exceeds the aggregate quantity demanded?
A)Aggregate demand shifts to the right.
B)Aggregate supply shifts to the left.
C)A surplus causes the price level to rise.
D)A surplus causes the price level to fall.

Question

Quizplus · Accepted Answer

If at a particular price level, the aggregate quantity supplied exceeds the aggregate quantity demanded, it creates a surplus in the market. Due to the surplus, sellers compete to sell their products, and buyers have less incentive to buy. As a result, the price level falls until it reaches a level where the quantity supplied and the quantity demanded are equal. Therefore, option D is the correct choice.

Which of the Following Results If at a Particular Price