________ will be associated with a constant price level when the increase in aggregate demand exactly equals the increase in long-run aggregate supply.
A)Economic growth
B)Economic stagnation
C)Economic inflation
D)Economic recession

Question

Quizplus · Accepted Answer

When the increase in aggregate demand exactly equals the increase in long-run aggregate supply, the economy is at its potential output level, which means that the economy is experiencing economic growth. At this level of output, there is no pressure on the price level to increase or decrease. Therefore, choice A, economic growth, will be associated with a constant price level.

________ Will Be Associated with a Constant Price Level When