As long as aggregate supply remains constant, the greater the increase in aggregate demand the:
A)greater the increase in the general level of prices
B)greater the increase in the rate of unemployment
C)smaller the decrease in employment
D)larger the increase in real output

Question

Quizplus · Accepted Answer

When aggregate demand increases while aggregate supply remains constant, it generally leads to an increase in the general level of prices, as demand outstrips supply, causing inflation.

As Long as Aggregate Supply Remains Constant, the Greater the Increase