Exhibit 14-8 Aggregate Demand and Supply

Multiple Choice

Exhibit 14-8 Aggregate demand and supply

In Exhibit 14-8, if aggregate demand shifts from AD₁ to AD₃,

A) real GDP will increase from $3.0 to $4.0, and the price level will increase from 100 to 140.
B) real GDP will increase from $3.0 to $7.0, and the price level will increase from 100 to 140.
C) real GDP will increase from $3.0 to $4.0, and the price level does not change.
D) real GDP will increase from $3.0 to $7.0, and the price level will increase from 100 to 120.