Figure 15-3
-Figure 15-3 indicates that,in the short run,an unexpected increase in aggregate demand would cause
A)the price level to fall.
B)the price level to rise.
C)the unemployment rate to rise.
D)real GDP to decrease.

Question

Figure 15-3 
-Figure 15-3 indicates that,in the short run,an unexpected increase in aggregate demand would cause
A)the price level to fall. 
B)the price level to rise. 
C)the unemployment rate to rise. 
D)real GDP to decrease.

Quizplus · Accepted Answer

According to the graph, an unexpected increase in aggregate demand shifts the SRAS curve to the left, causing both the price level and real GDP to increase. However, since the increase in GDP is achieved through an increase in output and employment, the unemployment rate falls. Therefore, choice B is the correct answer.

Figure 15-3 -Figure 15-3 Indicates That,in the Short Run,an Unexpected Increase in Unexpected