An implication of the long-run aggregate supply curve is that continuous increases in the money supply will result in continuous
A) increases in price level.
B) decreases in output and price level.
C) decreases in output.
D) increases in output and price level.

Question

Quizplus · Accepted Answer

The long-run aggregate supply curve is vertical, indicating that in the long run, changes in the money supply only affect the price level, not output. Therefore, continuous increases in the money supply will result in continuous increases in the price level.

An Implication of the Long-Run Aggregate Supply Curve Is That