Most economists believe that changes in the price level have
A)no effect on the quantity of output supplied in either the short run or the long run.
B)an effect on the quantity of output supplied in the short run, but not in the long run.
C)an effect on the quantity of output supplied in the long run, but not in the short run.
D)an effect on the quantity of output supplied in both the short run and the long run.

Question

Quizplus · Accepted Answer

Most economists agree that in the short run, changes in the price level can affect the quantity of output supplied due to price/wage stickiness and other short-term adjustments. However, in the long run, the economy is seen to adjust to its full employment output level, making the quantity of output supplied independent of the price level, as prices and wages fully adjust to changes.

Most Economists Believe That Changes in the Price Level Have