When aggregate demand increases,
A)the price level is likely to rise as GDP rises.
B)the price level is likely to fall as GDP rises.
C)aggregate supply will shift to the right.
D)aggregate supply will shift to the left.

Question

Quizplus · Accepted Answer

An increase in aggregate demand means there is more demand for goods and services in the economy. This increased demand will cause prices to rise as suppliers struggle to keep up with the higher level of demand. As prices rise, GDP will also increase as suppliers are able to produce more goods and services at a profitable price level.

When Aggregate Demand Increases