If the aggregate demand curve shifts to the right in the short run then the long-run equilibrium will be at a:
A) higher price level and higher level of output.
B) higher price level and lower level of output.
C) higher price level and same level of output.
D) lower price level and higher level of output.

Question

Quizplus · Accepted Answer

In the long run, the economy returns to its potential output level, but with a higher price level due to the initial rightward shift in aggregate demand.

If the Aggregate Demand Curve Shifts to the Right in the Short