Last year in the country of Union, the price level increased and real GDP increased. Such an outcome might have occurred because short-run aggregate supply __________ and aggregate demand __________ .
A) increased; did not change
B) did not change; increased
C) decreased; decreased
D) increased; decreased

Question

Quizplus · Accepted Answer

When aggregate demand increases, it leads to higher price levels and an increase in real GDP, assuming short-run aggregate supply remains unchanged.

Last Year in the Country of Union, the Price Level