If there is an increase in aggregate supply while aggregate demand remains unchanged, then:
A) the inﬂation rate decreases.
B) the equilibrium GDP decreases.
C) the standard of living in the economy falls.
D) the purchasing power of money decreases.

Question

Quizplus · Accepted Answer

When aggregate supply increases while aggregate demand remains unchanged, it typically results in lower prices for goods and services, which can lead to a decrease in the inflation rate. This is because the increased supply can satisfy the same level of demand at a lower price, reducing the pressure on prices to rise.

If There Is an Increase in Aggregate Supply While Aggregate