Which of the following is most likely to accompany an unanticipated increase in short-run aggregate supply?
A)an increase in real GDP
B)a decrease in real GDP
C)an increase in the price level
D)an increase in the unemployment rate

Question

Quizplus · Accepted Answer

An unanticipated increase in short-run aggregate supply means that more goods and services are being produced than expected, which leads to an increase in real GDP. This occurs because firms are producing more output while keeping prices constant, which increases their profits. The increase in production could also lead to a decrease in the price level, but it is not as likely as an increase in real GDP. A decrease in real GDP or an increase in the unemployment rate would be the result of a decrease in aggregate supply.

Which of the Following Is Most Likely to Accompany an Unanticipated