If a country's short-run aggregate supply increases, output _____, and the price level:
A) rises; rises.
B) rises; falls.
C) falls; rises.
D) falls; falls.

Question

Quizplus · Accepted Answer

When a country's short-run aggregate supply increases, it means that the country can produce more goods and services at every price level. This leads to an increase in output (real GDP) and a decrease in the price level due to the higher supply, making choice B correct.

If a Country's Short-Run Aggregate Supply Increases, Output _____, and the Price