What could create an increase in the price level and a decrease in real GDP in the short run?
A) an increase in the money supply
B) an increase in government expenditures
C) a fall in stock prices
D) bad weather in agriculture producing provinces

Question

Quizplus · Accepted Answer

Bad weather in agriculture-producing provinces can reduce the supply of agricultural goods, leading to higher prices (increased price level) and lower output (decreased real GDP) in the short run.

What Could Create an Increase in the Price Level and a Decrease