Which of the following best describes the result of an increase in the price level in the long run?
A)Output prices could either rise or fall relative to input prices.
B)Output prices will rise relative to input prices.
C)Output prices will fall relative to input prices.
D)Output prices will not change relative to input prices.

Question

Quizplus · Accepted Answer

In the long run, input prices adjust to changes in the price level, so output prices and input prices change proportionally, leaving their relative relationship unchanged.

Which of the Following Best Describes the Result of an Increase