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Given a fixed upsloping AS curve, a rightward shift of the AD curve will

Multiple Choice
cause cost-push inflation.
increase real output but not the price level.
increase the price level but not real output.
increase both the price level and real output.

1 answer

Given a fixed upsloping Aggregate Supply (AS) curve, a rightward shift of the Aggregate Demand (AD) curve will typically lead to an increase in both the price level and real output.

Therefore, the correct answer is:

increase both the price level and real output.