In the short run,an increase in real GDP will
A) increase unit costs and increase the price level
B) increase unit costs and decrease the price level
C) decrease unit costs and decrease the price level
D) decrease unit costs and increase the price level
E) have no effect on unit costs or the price level

Question

Quizplus · Accepted Answer

In the short run, an increase in real GDP typically leads to higher demand for goods and services, which can increase unit costs due to higher input prices or wages, and consequently, the price level may rise due to increased demand pressures.

In the Short Run,an Increase in Real GDP Will