An increase in aggregate demand results in
A)a higher unemployment rate and a lower price level.
B)an increase in real GDP and a decrease in the price level.
C)a lower unemployment rate and a higher price level.
D)a decrease in real GDP and a decrease in the price level.
E)a lower unemployment rate and a lower price level.

Question

Quizplus · Accepted Answer

An increase in aggregate demand typically leads to higher real GDP and a higher price level, as more goods and services are demanded, leading to increased production and potentially higher prices. This also tends to lower the unemployment rate as more workers are needed to meet the increased demand.

An Increase in Aggregate Demand Results in