If the AD curve shifts rightward, then
A) both the price level and real GDP will increase.
B) potential GDP increases.
C) the price level will increase, but no change will occur in real GDP.
D) both the price level and real GDP will decrease.
E) the price level will not change, but real GDP will increase.

Question

Quizplus · Accepted Answer

When the Aggregate Demand (AD) curve shifts rightward, it indicates an increase in the total demand for goods and services in an economy at every price level. This leads to both the price level and real GDP increasing as the economy moves to a higher point on the Aggregate Supply curve.

If the AD Curve Shifts Rightward, Then