The country of Mu has continuous strong economic growth and a steady price level. This situation is most likely the result of aggregate demand growing _ aggregate supply.
A) much faster than long- run
B) much slower than long- run
C) at much the same pace as long- run
D) at the same pace as short- run

Question

Quizplus · Accepted Answer

When aggregate demand grows at the same pace as long-run aggregate supply, the economy can experience continuous strong economic growth and a steady price level. This is because the growth in demand is matched by an increase in supply, resulting in a stable equilibrium. If demand grew much faster than long-run supply, it could lead to inflation as the economy begins to push against its productive capacity. Similarly, if demand grew much slower than long-run supply, it could lead to a recession as businesses are not able to sell enough of their goods and services.

The Country of Mu Has Continuous Strong Economic Growth and a Steady