-In the above figure, the economy is at point A when changes occur. If the new equilibrium has a price level of 100 and real GDP of $13.0 trillion, then it must be the case that
A) aggregate demand has increased.
B) aggregate demand has decreased.
C) aggregate supply has increased.
D) aggregate supply has decreased.

Question

-In the above figure, the economy is at point A when changes occur. If the new equilibrium has a price level of 100 and real GDP of $13.0 trillion, then it must be the case that
A) aggregate demand has increased. 
B) aggregate demand has decreased. 
C) aggregate supply has increased. 
D) aggregate supply has decreased.

Quizplus · Accepted Answer

An increase in aggregate supply would lead to a lower price level and higher real GDP, which matches the new equilibrium conditions of a price level of 100 and real GDP of $13.0 trillion.

-In the Above Figure, the Economy Is at Point a When