If real output rises and the price level falls,this would likely be due to a:
A) rightward shift of the aggregate demand curve.
B) leftward shift of the aggregate demand curve.
C) rightward shift of the aggregate supply curve.
D) leftward shift of the aggregate supply curve.

Question

Quizplus · Accepted Answer

A rise in real output and a fall in the price level are both consistent with an increase in aggregate supply. This would be represented by a rightward shift of the aggregate supply curve. Therefore, choice C is the best answer. A rightward shift of the aggregate demand curve would result in higher output and higher prices, while a leftward shift of either curve would result in lower output and higher prices.

If Real Output Rises and the Price Level Falls,this Would