An increase in the aggregate demand curve will, in the short run, change:
A)output but not price level.
B)the price level but not output.
C)both output and the price level.
D)neither output nor the price level.

Question

Quizplus · Accepted Answer

In the short run, an increase in the aggregate demand curve typically leads to increases in both output and the price level. This is because, with some prices (like wages) and capacities fixed in the short term, firms respond to higher demand by producing more and raising prices.

An Increase in the Aggregate Demand Curve Will, in the Short