In the long run, total spending affects ________, and output is determined by ________.
A)inputs and productivity; prices
B)inputs and productivity; total spending
C)prices; inputs and productivity
D)prices; meeting demand at preset prices

Question

Quizplus · Accepted Answer

In the long run, aggregate demand affects nominal variables like prices. In the long run, however, the economy's ability to produce, which is related to the economy's available inputs and productivity, determines output.

In the Long Run, Total Spending Affects ________, and Output