Question

Economics Question

Assume that \((a)\) the price level is flexible upward but not downward and \((b)\) the economy is currently operating at its full-employment output. Other things equal, how will each of the following affect the equilibrium price level and equilibrium level of real output in the short-run?

a) An increase in aggregate demand
b) A decrease in aggregate supply, with no change in aggregate demand.
c) Equal increases in aggregate demand and aggregate supply.
d) A decrease in aggregate demand.
e) An increase in aggregate demand that exceeds an increase in aggregate supp