Since the end of World War II,the U.S.has almost always had rising prices and an upward trend in real GDP.To explain this
A)it is only necessary that long-run aggregate supply shifts right over time.
B)it is only necessary that aggregate demand shifts right over time.
C)both aggregate demand and long-run aggregate supply must be shifting right and aggregate demand must be shifting farther.
D)None of the above cases would produce rising prices and growing real GDP over time.

Question

Quizplus · Accepted Answer

For rising prices and an upward trend in real GDP over time, both aggregate demand and long-run aggregate supply must be shifting right, but aggregate demand must be shifting farther. This leads to an increase in both output and prices. Simply having a rightward shift in either aggregate demand or long-run aggregate supply alone would not necessarily lead to both rising prices and increasing real GDP over time.

Since the End of World War II,the U