Starting from Short-Run Equilibrium,the Following Occurs: Labor Productivity Rises and Individuals

Multiple Choice

Starting from short-run equilibrium,the following occurs: labor productivity rises and individuals expect higher (future) incomes.What is the effect on the price level and Real GDP in the short run?

A) Real GDP falls and the price level necessarily rises.
B) Real GDP rises and the effect on the price level cannot be determined.
C) Real GDP rises and the price level necessarily falls.
D) Real GDP falls and the effect on the price level cannot be determined.
E) Real GDP rises and the price level necessarily rises.