The economy is initially in short-run equilibrium when incomes taxes decline and productivity rises. If the change in aggregate demand is greater than the change in short-run aggregate supply, what will happen to the equilibrium price level and level of Real GDP?

Wallis company manufactures only one product and uses a standard cost system. the company uses a predetermined plantwide overhead rate that relies on direct labor-hours as the allocation base. all of the company's manufacturing overhead costs are fixed—it does not incur any variable manufacturing overhead costs. the predetermined overhead rate is based on a cost formula that estimated $2,886,000 of fixed manufacturing overhead for an estimated allocation base of 288,600 direct labor-hours. wallis does not maintain any beginning or ending work in process inventory.