Multiple Choice
If the economy is in equilibrium at full employment, an increase in aggregate demand will:
A) increase both the price level and the level of output in the long run.
B) increase the price level and leave the level of output unchanged in the long run.
C) decrease the price level and leave the level of output unchanged in the long run.
D) decrease both the price level and the level of output in the long run.
Correct Answer:

Verified
Correct Answer:
Verified
Q2: The marginal propensity to consume is always
Q3: Using aggregate demand and aggregate supply curves,
Q4: The four components of the aggregate demand
Q5: Aggregate demand refers to the demand for
Q6: In the short- run, an increase in
Q7: An increase in the price level results
Q8: When output falls below full employment output,
Q9: If the marginal propensity to consume is
Q10: Compared to the long run aggregate supply
Q11: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB5231/.jpg" alt=" Figure 9.4 -Refer