An increase in aggregate demand results in
A) a higher unemployment rate and a lower price level.
B) a lower unemployment rate and a higher price level.
C) an increase in real GDP and a decrease in the price level.
D) a decrease in real GDP and a decrease in the price level.
E) a lower unemployment rate and a lower price level.

Question

Quizplus · Accepted Answer

An increase in aggregate demand leads to an increase in output and employment, which in turn leads to a higher price level.

An Increase in Aggregate Demand Results in