An economy experiences increasing raw material costs together with a drop in business confidence. What effect will this have on the economy’s real GDP and price level?
- Areal GDP: it may rise or fall; price level: it will rise
- Breal GDP: it will fall; price level: it may rise or fall
- Creal GDP: it will fall; price level: it will fall
- Dreal GDP: it will rise; price level: it may rise or fall