A simultaneous rise in both aggregate demand and short-run aggregate supply will definitely
A) raise the price level,but there is not enough information provided to know how Real GDP will change.
B) lower Real GDP,but there is not enough information provided to know how the price level will change.
C) raise the price level and Real GDP.
D) raise Real GDP,but there is not enough information provided to know how the price level will change.
E) raise the price level and lower Real GDP.

Question

Quizplus · Accepted Answer

When both aggregate demand and short-run aggregate supply increase, Real GDP will definitely rise, but the effect on the price level is uncertain as it depends on the relative magnitudes of the shifts.

A Simultaneous Rise in Both Aggregate Demand and Short-Run Aggregate