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If the Economy Is Initially at Long-Run Equilibrium and Aggregate

Question 2

Multiple Choice

If the economy is initially at long-run equilibrium and aggregate demand declines,then in the long run the price level


A) and output are higher than in the original long-run equilibrium.
B) and output are lower than in the original long-run equilibrium.
C) is lower and output is the same as the original long-run equilibrium.
D) is the same and output is lower than in the original long-run equilibrium.

Correct Answer:

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