Suppose the Economy Is in Equilibrium on the LRAS Curve

question 32

Multiple Choice

Suppose the economy is in equilibrium on the LRAS curve and government spending increases.In the long run

• A)prices and output will return to the original levels.
• B)prices will increase,but output will return to the original level.
• C)prices and output will increase.
• D)output will increase and prices will decrease.

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