In the short run, an expansionary demand shock causes the average price level to _____ and the total output level to:
A) fall; rise.
B) fall; fall.
C) rise; rise.
D) rise; fall.

Question

Quizplus · Accepted Answer

An expansionary demand shock in the short run typically leads to an increase in the average price level due to higher demand, and it also causes the total output level to rise as firms increase production to meet the higher demand.

In the Short Run, an Expansionary Demand Shock Causes the Average