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If there is an equal increase in aggregate demand and aggregate supply: A?the price level rises and real output decreases. B?the price level rises rapidly
If there is an equal increase in aggregate demand and aggregate supply:
- A?the price level rises and real output decreases.
- B?the price level rises rapidly and there is little change in real output.
- C?the price level does not change, but real output declines.
- D?the price level does not change, but real output increases.
- E?the price level increases somewhat, with a relatively large change in output.
If the increase in aggregate demand exceeds the increase in aggregate supply:
- A?the price level rises and real output decreases.
- B?the price level rises rapidly and there is little change in real output.
- C?the price level does not change, but real output declines.
- D?the price level does not change, but real output increases.
- E?the price level increases somewhat, with a relatively large change in output.
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