If both the price level and nominal incomes change by the same percentage:
A) real GDP will remain constant.
B) the aggregate supply curve will be upward-sloping.
C) profit margins will change in real terms.
D) the long-run aggregate supply curve will be horizontal.
E) both a and d.

Question

Quizplus · Accepted Answer

When both the price level and nominal incomes change by the same percentage, real GDP remains constant because real GDP is adjusted for changes in the price level, reflecting the actual output of goods and services.

If Both the Price Level and Nominal Incomes Change by the Same