The figure below reflects the inverse relationship between real GDP and the price level.If the economy is initially at point c and aggregate demand is stable,in the long run,the economy will:
Figure 16.4

A)move toward point a
B)move toward point b
C)stay at point c
D)move toward point d
E)move toward point f

Question

The figure below reflects the inverse relationship between real GDP and the price level.If the economy is initially at point c and aggregate demand is stable,in the long run,the economy will:​ ​
Figure 16.4
​

A)move toward point a 
B)move toward point b 
C)stay at point c 
D)move toward point d 
E)move toward point f

Quizplus · Accepted Answer

In the long run, the economy will return to its potential output level, which is represented by the vertical axis of the graph. Since the economy is initially at point c, which represents the potential output level, there is no need for it to adjust. Therefore, it will stay at point c.

The Figure Below Reflects the Inverse Relationship Between Real GDP