In the view of the Classical economists, a increase in aggregate demand leads to
A) lower output levels.
B) a higher price level.
C) higher output levels.
D) a lower price level.

Question

Quizplus · Accepted Answer

Classical economists believe that in the long run, the economy operates at full employment, so an increase in aggregate demand primarily leads to a higher price level rather than an increase in output.

In the View of the Classical Economists, a Increase in Aggregate