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Retnec Retnec
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7 years ago
Which of the following is a true statement about the model of a self-correcting economy?
A) If the economy starts in long run equilibrium at $5 trillion, an increase in aggregate demand will ultimately result in an equilibrium output of $5 trillion and a higher price level.
B) If the economy starts in a long-run equilibrium at $5 trillion, a reduction in aggregate demand will ultimately result in an equilibrium output of $5 trillion and a lower price level.
C) Because increases or decreases in aggregate demand change only prices in the long run, the long-run aggregate supply curve is a vertical straight line.
D) All of the above
Textbook 
Introduction to Economic Reasoning

Introduction to Economic Reasoning


Edition: 8th
Author:
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hecosmetichecosmetic
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Retnec Author
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#2
7 years ago
My exam's next week!

Perfect timing
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