Exhibit 20-5 Money, Investment and product markets In Exhibit 20-5, a shift in aggregate demand from AD₂ to AD₃:

Question

Quizplus · Accepted Answer

A shift in aggregate demand from AD₂ to AD₃ would increase demand for goods and services, which would lead to an increase in real GDP. However, as demand increases, prices will also increase, leading to a higher price level. Therefore, the correct answer is C (increases real GDP, and raises the price level).

Exhibit 20-5 Money, Investment and Product Markets in Exhibit 20-5