Final answer:
In the long run, the economy's output level will adjust to potential GDP, not increasing or decreasing significantly, but staying the same despite any initial movements due to decreases in the price level.
Step-by-step explanation:
In the context of the neoclassical perspective, if the price level decreases, the short-run effect might result in increased output as firms take advantage of lower costs. However, this is just the initial phase. In the long run, the economy's output level will adjust, and any deviation from the potential GDP would be corrected. As unemployment rises, wages may stagnate or decrease, shifting the short-run Keynesian aggregate supply curve rightward. Ultimately, the real GDP size is determined by potential GDP and aggregate supply, and thus, the output level returns to its potential, meaning it does not increase or decrease but stays the same, despite the downward pressure on the price level.