Suppose the price of a key productive resource such as fuel increases. Other things being equal, which of the following will be a consequence of the increase in fuel price?
A. An increase in aggregate supply
B. An increase in aggregate demand
C. An increase in the equilibrium price level and a decrease in the equilibrium real GDP
D. A decrease in the equilibrium price level and an increase in equilibrium real GDP
E. An increase in the equilibrium price level but no effect on the equilibrium real GDP
Answer: C
Microeconomics
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