If aggregate demand increases (shifts out) while aggregate supply is stable, aggregate output will unemployment rate will A decrease; decrease B

Economics Dec 12, 2020

If aggregate demand increases (shifts out) while aggregate supply is stable, aggregate output will unemployment rate will A decrease; decrease B. decrease: increase C. increase; increase D. increase; decrease

Expert Solution

Answer

Option B

decrease; increase

The aggregate demand curve shifts to the left and decreases both price level and real income (GDP) and increases unemployment as some of the resources will be unemployed because of the lower quantity supplied.

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