If the Current Short-Run Equilibrium Level of Output Is Greater

question 128

Multiple Choice

If the current short-run equilibrium level of output is greater than full employment output,we can then expect that in the long run:

• A) the price level will rise and short-run aggregate supply will fall.
• B) the price level will rise and aggregate demand will fall.
• C) the price level will fall and short-run aggregate supply will rise.
• D) the price level will fall and aggregate demand will rise.
• E) the long-run aggregate supply will increase.

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