If aggregate demand shifts left, then in the short run

Question

a.

the price level and real GDP both rise.
b.

the price level falls and real GDP rises.
c.

the price level rises and real GDP falls.
d.

the price and real GDP both fall.

Answer 1

If aggregate demand shifts left, it typically indicates a decrease in the overall demand for goods and services in the economy. In the short run, this would generally lead to a reduction in both the price level and real GDP.

Therefore, the correct answer is:

d. the price and real GDP both fall.