An Increase in Aggregate Demand in the Economy Will Have

question 106

Multiple Choice

An increase 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 rise.
• 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 be unaffected and the level of GDP will rise.

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Definitions:

Car Leasing Company

A business that rents vehicles to customers for a specified period of time, often as an alternative to purchasing.

Marginal Product

The additional output generated by adding one more unit of a specific input, holding all other inputs constant.

Output Units

The quantity of goods or services produced, measured in units, which can refer to individual items, batches, or specific measures of output.