if-aggregate-demand-increases-by-10-and-short-run-aggregate-supply-decreases-by-

Question

If aggregate demand increases by 10% and short-run aggregate supply decreases by 5%, what is the likely impact on equilibrium price levels and GDP?

Accepted Answer

Price levels increase and GDP decreases.

Answer

Price levels increase and GDP remains constant.

Answer

Price levels remain constant and GDP increases.

Answer

Price levels decrease and GDP increases.