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What Happens If Aggregate Demand Decreases Simultaneously with an Increase

Question 64

Multiple Choice

What happens if aggregate demand decreases simultaneously with an increase in short-run aggregate supply,due to anticipated contractionary monetary policy?


A) The price level remains constant,and real gross domestic product (GDP) decreases.
B) The price level increases,and real gross domestic product (GDP) increases.
C) The price level increases,and real gross domestic product (GDP) decreases.
D) The price level decreases,and real gross domestic product (GDP) remains constant.
E) The price level increases,and real gross domestic product (GDP) remains constant.

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