What must the government do in order to maintain real output above its natural level for a sustained period of time?
A)Bring about repeated increases in the level of aggregate demand.
B)Bring about a one-shot permanent increase in aggregate demand.
C)Increase aggregate demand and then maintain the new level of demand.
D)Shift the aggregate demand curve to the right and then allow aggregate demand to slowly decrease.

Question

Quizplus · Accepted Answer

To maintain real output above its natural level, the government must continuously increase aggregate demand, as a one-time increase or maintaining a new level will not sustain higher output due to inflationary pressures and eventual return to natural output levels.

What Must the Government Do in Order to Maintain Real