A decrease in aggregate supply means:

A. Both the real domestic output and the price level would decrease.

B. The real domestic output would increase and rises in the price level would become smaller.

C. The real domestic output would decrease and the price level would rise.

D. Both the real domestic output and rises in the price level would become greater.

Question

Business

Shawn

11 August, 15:07

A decrease in aggregate supply means:

A. Both the real domestic output and the price level would decrease.

B. The real domestic output would increase and rises in the price level would become smaller.

C. The real domestic output would decrease and the price level would rise.

D. Both the real domestic output and rises in the price level would become greater.

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Answers (1)

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Perez · Answer 1

C. The real domestic output would decrease and the price level would rise.

Explanation:

as the As decreases, it will decrease the real output of the economy.

the decrease in the supply will lead to the deficit supply and increasing in the price level of the economy.