In the long run, if aggregate demand increases,
A)output increases while prices fall.
B)only prices fall.
C)only prices rise.
D)both output and prices fall.

Name: In the long run, if aggregate demand increases, A)output increases while prices fall. B)only prices fall. C)only prices rise. D)both output and prices fall.
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Question

Quizplus · Accepted Answer

In the long run, an increase in aggregate demand primarily leads to an increase in prices rather than a change in output, due to the economy operating at or near full employment.

In the Long Run, If Aggregate Demand Increases