Question

country experiences a decrease in the price level and a rise in real output. What combination of the 

changes in aggregate demand and supply would generate this outcome?

A. A decrease in aggregate demand but no change in aggregate supply.

B. An increase in aggregate supply but no change in aggregate demand.

C. A decrease in aggregate supply.

D. An decrease in both aggregate demand and aggregate supply

Answer 1

B. An increase in aggregate supply but no change in aggregate demand.