In the long run,an increase in productivity would cause output to ________ and the aggregate price level to ________.
A)fall; rise
B)fall; fall
C)rise; fall
D)rise; rise

Question

Quizplus · Accepted Answer

An increase in productivity leads to an increase in the aggregate supply of goods and services, which causes the output to rise. As the economy is producing more goods and services, the price level is expected to fall. Therefore, the correct answer is (C) rise; fall.

In the Long Run,an Increase in Productivity Would Cause Output