Assuming That the Economy Is Currently in a Long-Run Equilibrium

Multiple Choice

Assuming that the economy is currently in a long-run equilibrium at Y^*,a subsequent negative aggregate demand shock with no change in the money supply will eventually result in

A) no change in the price level.
B) an ongoing inflation in the economy.
C) a lower price level and GDP below potential output.
D) a higher price level and GDP at potential GDP.
E) a lower price level and GDP at its potential level.