The price level rises in the short run if
A)aggregate demand or aggregate supply shifts right.
B)aggregate demand shifts right or aggregate supply shifts left.
C)aggregate demand shifts left or aggregate supply shifts right.
D)aggregate demand or aggregate supply shifts right

Question

Quizplus · Accepted Answer

In the short run, the price level rises if aggregate demand shifts right or if aggregate supply shifts left. When aggregate demand shifts right, it puts pressure on prices to increase as demand exceeds supply. When aggregate supply shifts left, it means that the cost of production has increased, thereby increasing the prices of the products. Thus, option B is the correct choice.

The Price Level Rises in the Short Run If