If aggregate supply is upward sloping,an increase in aggregate demand will result in:
A) An increase in prices and a decrease in output.
B) An increase in prices and an increase in output.
C) A decrease in prices and a decrease in output.
D) A decrease in prices and an increase in output.

Question

Quizplus · Accepted Answer

If aggregate supply is upward sloping, when aggregate demand increases, the equilibrium will be at a higher quantity and a higher price level. This means that both output and prices will increase.

If Aggregate Supply Is Upward Sloping,an Increase in Aggregate Demand