In the long run, policy that changes aggregate demand changes
A)both unemployment and the price level.
B)neither unemployment nor the price level.
C)only unemployment.
D)only the price level.

Question

Quizplus · Accepted Answer

In the long run, changes in aggregate demand affect only the price level due to the economy's self-correcting mechanism, which returns output to its natural level, leaving unemployment unchanged.

In the Long Run, Policy That Changes Aggregate Demand Changes