Register
Assume that the economy is in​ long-run equilibrium with complete information and that input prices adjust rapidly to changes in the prices of goods and services. If there is a sudden rise in the price
43.9k views
5 votes
Assume that the economy is in​ long-run equilibrium with complete information and that input prices adjust rapidly to changes in the prices of goods and services. If there is a sudden rise in the price level induced by an increase in aggregate​ demand, real GDP will ▼ increase not change decrease .

User Avin Varghese
by
3.5k points

1 Answer

7 votes

Answer:

No change

Step-by-step explanation:

If an economy is in long-run equilibrium which means the economy will adjust itself and will adjust rapidly. Overall, if there is a change in the price level due to the increase in aggregate demand, the overall real GDP will remain the same. The GDP is the gross domestic product which will change if there is a variation in the overall domestic production.

User Raj Oberoi
by
3.2k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

3.4m questions

4.3m answers

Other Questions

How can expansionary​ expenditure-based fiscal policy lead to crowding out in the​ economy? A. ​Expenditure-based fiscal policy increases the national​ debt, inducing​ forward-looking households and firms
Stevenson Company purchased equipment for $250,000 on January 1, 2010. The estimated salvage value is $50,000, and the estimated useful life is 5 years. The straight-line method is used for depreciation.
In order to attract younger customers to the Lacoste brand of clothing, CEO Robert Siegel made all of the major decisions in product planning, distribution, and promotion. He asked for no input from his
The Yum and Yee food truck near the business school serves customers during lunch hour by taking orders and making fresh batches of stir-fry. Customers have only one choice during the lunch hour so that
At first Rohan thought it was a good idea to offer a car repair pick-up service at his auto repair shop, but then he realized that most customers called Tow-It-Now Inc. and it would be difficult to match
Link Copied!