In the Long-Run Equilibrium, an Increase in the Quantity of Capital

question 374

Multiple Choice

In the long-run equilibrium, an increase in the quantity of capital leads to

• A) an increase in the equilibrium price level and an increase in equilibrium real GDP.
• B) a decrease in the equilibrium price level and an increase in equilibrium real GDP.
• C) a decrease in the equilibrium price level, but no change in equilibrium real GDP.
• D) no change in the equilibrium price level, but an increase in equilibrium real GDP.