In the long run, policy that changes aggregate demand also changes which of the following?
A)both unemployment and the price level
B)neither unemployment nor the price level
C)only unemployment
D)only the price level

Question

Quizplus · Accepted Answer

In the long run, changes in aggregate demand affect only the price level due to the economy's self-correcting mechanism, which returns output to its natural level, leaving unemployment unchanged.

In the Long Run, Policy That Changes Aggregate Demand Also