Question

Generally speaking, as the aggregate price level rises, aggregate demand falls, resulting in

a. a decrease in aggregate supply.
b. an increase in aggregate supply.
c. an increase in total output, or the real GDP.
d. a decrease in total output, or the real GDP.

Answer 1

Generally speaking, as the aggregate price level rises, aggregate demand falls, resulting in an increase in aggregate supply

When the price rises, the sellers will gain more from the sale of their products. There fore , the average aggregrate supply in the market will be increased by them