Given the aggregate demand curve,an increase in the supply of a productive resource will:
A)increase output but leave prices unchanged.
B)decrease both output and prices.
C)increase the price level and decrease output.
D)decrease the price level and increase output.
E)increase the price level but leave output unchanged.

Question

Quizplus · Accepted Answer

An increase in the supply of a productive resource will shift the short-run aggregate supply curve to the right, resulting in a decrease in the price level and an increase in output. Therefore, the correct answer is D.

Given the Aggregate Demand Curve,an Increase in the Supply of a Productive