Which of the following changes will lead to an increase in both the price level and the quantity of output in an economy?
A)a rise in aggregate demand
B)a rise in aggregate supply
C)a fall in aggregate demand
D)a fall in aggregate supply

Question

Quizplus · Accepted Answer

An increase in aggregate demand will lead to an increase in both the price level and the quantity of output in an economy. This is because as demand for goods and services increases, producers will increase production to meet the demand, leading to an increase in output. However, as demand outstrips supply, prices will also rise.

Which of the Following Changes Will Lead to an Increase