An increase in aggregate demand in the long run, will change:
A)output but not price level.
B)the price level but not output.
C)both output and the price level.
D)neither output nor the price level.

Question

Quizplus · Accepted Answer

In the long run, an increase in aggregate demand is expected to change the price level due to inflationary pressures, but it does not change the output because the economy adjusts and operates at its potential output or full employment level.

An Increase in Aggregate Demand in the Long Run, Will