Starting initially at potential real GDP, an increase in aggregate demand shifts the aggregate demand curve ______, causing real GDP to________ and the price level to ______.
A. outward, rise, fall
B. inward, fall, fall
C. inward, fall, rise
D. outward, fall, fall
E. outward, rise, rise
Answer: E
Microeconomics
- An increase in the price level may be caused
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