If real output rises and the price level falls, this would likely be due to a:
A)rightward shift of the aggregate demand curve.
B)leftward shift of the aggregate demand curve.
C)rightward shift of the aggregate supply curve.
D)leftward shift of the aggregate supply curve.

Question

If real output rises and the price level falls, this would likely be due to a:
A)rightward shift of the aggregate demand curve. 
B)leftward shift of the aggregate demand curve. 
C)rightward shift of the aggregate supply curve. 
D)leftward shift of the aggregate supply curve.

Quizplus · Accepted Answer

This scenario is consistent with a rightward shift in the aggregate supply curve, which would result in an increase in real output and a decrease in the price level. A rightward shift in the aggregate demand curve would result in an increase in both real output and the price level. Shifts to the left in either curve would result in decreases in real output and increases in the price level.

If Real Output Rises and the Price Level Falls, This