If the equilibrium price level is 135 but the actual price level is 120,then
A)firms decrease their production because they cannot sell the output they produce.
B)the quantity of real GDP demanded is less than the quantity of real GDP supplied.
C)the quantity of real GDP demanded is greater than the quantity of real GDP supplied.
D)aggregate demand will increase to restore equilibrium.
E)aggregate demand will decrease to restore equilibrium.

Question

Quizplus · Accepted Answer

When the actual price level is below the equilibrium price level, the quantity of real GDP demanded is greater than the quantity of real GDP supplied, leading to upward pressure on prices.

If the Equilibrium Price Level Is 135 but the Actual