If the price level rises by 10%,then all else being equal,the long-run quantity of aggregate supply will:
A) increase by 10%.
B) decrease by 10%.
C) remain unchanged.
D) increase by more than 10%.
E) increase by less than 10%.

Question

Quizplus · Accepted Answer

In the long run, prices and wages adjust. Therefore, if the price level increases by 10%, wages will also increase by 10% in order to compensate for the higher cost of living. As a result, there won't be any change in the long-run aggregate supply.

If the Price Level Rises by 10%,then All Else Being