In the long run, an increase in the price level:
A)increases output prices relative to input prices.
B)increases the profit margins of many producers.
C)increases RGDP supplied.
D)Does none of the above.

Question

In the long run, an increase in the price level:
A)​increases output prices relative to input prices.
B)​increases the profit margins of many producers.
C)​increases RGDP supplied.
D)​Does none of the above.

Quizplus · Accepted Answer

In the long run, prices and wages adjust fully to changes in the price level, resulting in no change in RGDP supplied or relative prices. Therefore, none of the options listed are correct.

In the Long Run, an Increase in the Price Level