In the View of Real-Business-Cycle Theory, an Increase in the Long-Run

Multiple Choice

In the view of real-business-cycle theory, an increase in the long-run aggregate supply would lead to a(n)

A) increase in aggregate demand by an equal amount, so real output would increase and the price level would be unchanged.
B) increase in aggregate demand by an equal amount, so real output and the price level would increase.
C) decrease in aggregate demand, so real output would increase and the price level would decrease.
D) decrease in aggregate demand, so real output and the price level would increase.