From an initial AD/SAS/LAS intersection,a fiscal stimulus with no initial change in the nominal wage causes output to ________ while the price level ________.
A)rise,remains constant
B)rise,rises
C)remains constant,rises
D)remains constant,falls
E)fall,rises

Question

Quizplus · Accepted Answer

A fiscal stimulus increases aggregate demand, leading to higher output and a higher price level in the short run, assuming nominal wages are initially fixed.

From an Initial AD/SAS/LAS Intersection,a Fiscal Stimulus with No Initial