In the Long Run, an Increase in Aggregate Demand, All

question 73

Multiple Choice

In the long run, an increase in aggregate demand, all other things unchanged, will cause the price level to

• A) increase and potential output to increase.
• B) decrease and potential output to decrease.
• C) increase and potential output to remain stable.
• D) decrease and potential output to remain stable.

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Definitions:

Abandoned Contract

A contract that is no longer active because all parties have ceased to perform their obligations.

Quantum Meruit

A Latin term meaning "as much as he has earned," used in legal context to denote compensation deserved for services or work done when no contract exists.

Substantial Performance

A legal concept that a contract has been completed enough to fulfill its purpose, even if all details have not been precisely met.

Anticipatory Breach

A situation in contract law where one party indicates in advance that they will not fulfill their contractual obligations.