Why does the amount of national output remain steady in the long run even though the price level may change?
A) The price level has no impact on the amount of goods and services that are demanded.
B) The price level does not impact the stock of productive resources or technology.
C) Price-level changes are evidence of moving equilibriums and changing outputs.
D) When output varies, the price level must vary.

Question

Quizplus · Accepted Answer

The price level does not impact the fundamental factors such as the stock of productive resources (labor, capital, land) or the technology available, which determine the economy's capacity to produce goods and services in the long run. Changes in the price level are more related to the value of money and inflation rather than the actual capacity of the economy to produce.

Why Does the Amount of National Output Remain Steady in the Long