An Economy in Long-Run Equilibrium Experiences an Increase in Aggregate

question 263

Multiple Choice

An economy in long-run equilibrium experiences an increase in aggregate demand. According to the classical model,

• A) the price level will rise first, then real GDP will increase.
• B) the price level and real GDP will increase at the same time.
• C) the price level will increase, but real GDP will not change.
• D) the price level will increase, but real GDP will decrease.

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Definitions:

Office Salaries Payable

This term refers to the obligation or amounts due to office employees for wages earned but not yet disbursed by the company.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since its acquisition.

Worksheet

A worksheet is a document or a digital spreadsheet used for organizing, calculating, and analyzing data, especially for tasks involving financial information or planning.