Suppose the economy is initially in long-run equilibrium. Which statement best describes the state of the economy after an increase in aggregate demand?
A) Prices and output are higher.
B) Prices and output are lower.
C) Prices are higher and output is the same.
D) Prices are the same and output is lower.

Question

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The Answer of Suppose the economy is initially in long-run equilibrium. Which statement best describes the state of the economy after an increase in aggregate demand?
A) Prices and output are higher.
B) Prices and output are lower.
C) Prices are higher and output is the same.
D) Prices are the same and output is lower.

Suppose the Economy Is Initially in Long-Run Equilibrium