If the price level rises,what happens to the level of real GDP supplied?
A)It will decrease in both the short run and the long run.
B)It will decrease in the short run but not in the long run.
C)It will increase in both the short run and the long run.
D)It will increase in the short run but not in the long run.

Question

Quizplus · Accepted Answer

In the short run, an increase in the price level can lead to an increase in real GDP supplied due to higher profits and increased production. However, in the long run, real GDP is determined by factors like technology and resources, not the price level, so it does not increase.

If the Price Level Rises,what Happens to the Level of Real