What overall outcome is associated with a significant rise in aggregate demand?

A significant rise in aggregate demand typically leads to economic expansion and rising prices. When aggregate demand increases, it reflects a surge in the overall desire for goods and services within the economy. This increased demand can stimulate production as businesses respond to higher orders, ultimately leading to higher output levels and a reduction in unemployment.

As firms ramp up production to meet the heightened demand, they may face higher costs. Consequently, this rising demand can push prices upward, contributing to inflation. The interaction of increased economic activity and rising prices characterizes this phase, making it highly likely that the outcome of such an increase in aggregate demand is robust economic growth along with a rise in price levels.

This understanding highlights the relationship between aggregate demand shifts and their broader implications on the economy, reinforcing why the correct answer centers on economic expansion and rising prices.