An economy in long-run equilibrium experiences an increase in aggregat
An economy in long-run equilibrium experiences an increase in aggregate demand. According to the classical model,
A) the price level will increase, but real GDP will not change.
B) the price level and real GDP will increase at the same time.
C) the price level will increase, but real GDP will decrease.
D) the price level will rise first, then real GDP will increase.
ANSWER
A
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