Which of the following would cause prices to rise and real GDP to fall in the short run?
A)an increase in the expected price level
B)an increase in the capital stock
C)an increase in the quantity of labor available
D)All of the above are correct.

Question

Quizplus · Accepted Answer

An increase in the expected price level can lead to higher wages and production costs, causing prices to rise and potentially reducing output, thus decreasing real GDP in the short run.

Which of the Following Would Cause Prices to Rise and Real