If both aggregate supply and aggregate demand simultaneously increase,   a. the price level and equilibrium real GDP will both remain unchanged. b. the price level will increase, but equilibrium real GDP will decline. c. equilibrium real GDP will increase, but we cannot predict what will happen to the price level. d. the price level will increase, but we cannot predict what will happen to equilibrium real GDP. e. the price level and equilibrium real GDP will both decline.

Economics:
10th Edition
ISBN:9781285859460
Author:BOYES, William
Publisher:BOYES, William
Chapter8: Macroeconomic Equilibrium: Aggregate Demand And Supply
Section: Chapter Questions
Problem 14E
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If both aggregate supply and aggregate demand simultaneously increase,


 

a.

the price level and equilibrium real GDP will both remain unchanged.

b.

the price level will increase, but equilibrium real GDP will decline.

c.

equilibrium real GDP will increase, but we cannot predict what will happen to the price level.

d.

the price level will increase, but we cannot predict what will happen to equilibrium real GDP.

e.

the price level and equilibrium real GDP will both decline.

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