In the long run, an increase in the aggregate price level:
A) doesn't change real output.
B) decreases real output.
C) increases real output.
D) may increase or decrease real output.

Question

Quizplus · Accepted Answer

In the long run, an increase in the aggregate price level does not change real output because the economy adjusts to changes in the price level through changes in wages and other resource prices, allowing full employment output to be maintained.

In the Long Run, an Increase in the Aggregate Price