In the classical range of the aggregate supply curve, greater spending for consumer and investment goods results in:
A) stagflation.
B) more unemployment.
C) greater output.
D) a higher price level.

Question

Quizplus · Accepted Answer

In the classical range of the aggregate supply curve, the economy is at or near full employment, so increases in spending primarily lead to higher prices rather than increases in output, resulting in a higher price level.

In the Classical Range of the Aggregate Supply Curve, Greater