Multiple Choice
A decrease in aggregate demand in the economy will have what effect on macroeconomic equilibrium in the long run?
A) The price level will fall, and the level of GDP will be unaffected.
B) The price level will fall, and the level of GDP will fall.
C) The price level will rise, and the level of GDP will fall.
D) The price level will rise, and the level of GDP will be unaffected.
E) The price level will fall, and the long-run level of GDP will become more sensitive to changes in the price level.
Correct Answer:
Verified
Correct Answer:
Verified
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