According to Classical Macroeconomic Theory,if Real GDP Is Below the Full-Employment

question 170

Multiple Choice

According to classical macroeconomic theory,if real GDP is below the full-employment level,then an increase in aggregate demand will result in which of the following changes in equilibrium?

• A) Real GDP will rise, but the price level will remain constant.
• B) Real GDP and the price level will both rise.
• C) Real GDP will remain unchanged but the price level will rise.
• D) None of the above.

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