In the long run, demand-pull inflation leads to
A)higher unemployment and a higher price level.
B)lower real wages and higher unemployment.
C)lower real output and no change in unemployment.
D)a higher price level and no change in real output.

Question

Quizplus · Accepted Answer

In the long run, demand-pull inflation results in a higher price level as aggregate demand increases, but real output remains unchanged due to the economy operating at full capacity.

In the Long Run, Demand-Pull Inflation Leads to