The country of Mu has continuous strong economic growth and a steady price level. This situation is most likely the result of aggregate demand growing ____________aggregate supply.
A) at the same pace as long-run
B) slower than long-run
C) faster than long-run
D) slower than short-run

Question

Quizplus · Accepted Answer

When aggregate demand grows at the same pace as long-run aggregate supply, the economy experiences full employment and a stable price level. This indicates a steady equilibrium between aggregate demand and supply, resulting in continuous strong economic growth and a stable price level in the long run. The other options either suggest a potential economic downturn (slower than long-run or short-run aggregate supply) or an inflationary trend (faster than long-run aggregate supply).

The Country of Mu Has Continuous Strong Economic Growth and a Steady