In the short run,when there is an increase in aggregate demand,the aggregate price level will _____ and the aggregate output level will _____.
A) rise;fall
B) rise;rise
C) fall;rise
D) fall;fall

Question

Quizplus · Accepted Answer

An increase in aggregate demand will lead to an increase in both aggregate price level and aggregate output level in the short run. This is because businesses will increase their supply to meet the higher demand, which will lead to an increase in output level. At the same time, the increased demand will put pressure on prices, leading to an increase in the aggregate price level. Therefore, option B is the correct answer.

In the Short Run,when There Is an Increase in Aggregate