Question

Suppose the equilibrium aggregate price level and real GDP are rising. This is probably the effect of a(n) _____ in aggregate _____. decrease; demand decrease; supply increase; demand increase; supply

Answer 1

Suppose the equilibrium aggregate price level and the equilibrium level of real GDP are both rising. This is probably the effect of a increase in aggregate demand.

What is aggregate demand?

The entire demand for these products and services during the given time period is represented by aggregate demand. Because aggregate demand and gross domestic product (GDP) are determined in the same way, they eventually balance each other out. As a result, changes in aggregate demand and GDP are correlated.

The relationship between the price level and all of the expenditure that individuals, businesses, the government, and other nations are willing to make at each price level is represented graphically by aggregate demand. That should sound familiar if it does. The elements that make up aggregate demand are the same elements that make up real GDP when utilizing the expenditures method:

• Consumption
• Investments
• Federal spending
• Gross exports

Hence, when both the equilibrium level of real GDP and the equilibrium level of aggregate prices are increasing. This is most likely the result of rising aggregate demand.

To know more about aggregate demand refer to: brainly.com/question/3331860

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