If the aggregate demand curve shifts to the left, the long-run equilibrium will occur at a _______ price level and _______ level of output.
A) higher; the same
B) higher; lower
C) lower; the same
D) lower; lower

Question

Quizplus · Accepted Answer

In the long-run, the economy adjusts to shifts in aggregate demand, leading to a new equilibrium at the same level of output but at a lower price level. This is because, in the long-run, prices are flexible, allowing the economy to return to its potential output.

If the Aggregate Demand Curve Shifts to the Left, the Long-Run