If aggregate demand and aggregate supply both shift left, we can be sure that the price level is higher in the short run

Solution:

In short run, if both aggregate demand and aggregate supply curve move to left, the short run real output or real gross domestic product (GDP) would definitely fall, however, whether the short run price would increase or decrease is uncertain. If magnitude of shift in demand curve is more than supply curve, the price level would be lower (as change in aggregate demand dominates here, and such low demand will force price to fall at lower level), and if magnitude of shift in aggregate supply curve is more than aggregate demand curve, the price level would be higher (as now the lower aggregate supply dominates lower aggregate demand).

Thus, the correct answer is (b) False.