Canadian Businesses Expect Future Profits to Rise

Multiple Choice

Canadian businesses expect future profits to rise.Starting from a position of long- run equilibrium, what effect does this event have on Canada's economy in the short run?

A) Real GDP increases and the price level rises.
B) Real GDP decreases and the price level falls.
C) Real GDP increases and the price level falls.
D) Real GDP decreases and the price level rises.
E) There is no change in either real GDP or the price level.