If the Economy Is in Long Run Equilibrium and Then

question 163

Multiple Choice

If the economy is in long run equilibrium and then aggregate demand increases, in the long run the increase in aggregate demand means that the

• A) real GDP will be larger but the price level will be unaffected.
• B) the price level will be higher and real GDP will be larger.
• C) price level will be higher but real GDP will be unaffected.
• D) neither the price level nor real GDP will be unaffected.

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Definitions:

Land Improvement

Enhancements made to a piece of land to increase its value, such as landscaping, paving, and installing utilities.

Shrubbery

Plants, bushes, and small trees used for landscaping and decoration.

Fences

Physical barriers constructed to enclose or mark the boundary of a property or area.

Non-Depreciable Asset

A Non-Depreciable Asset is an asset that is not subject to depreciation due to its infinite useful life or being an intangible asset without physical substance, like land.