Question

In the Classical model, if there is an increase in

Q: Answer-In the Classical model, if there is an increase in aggregate demand, what will be the long-run effec...

In this case, AS is vertical and AD is downward sloping, hence if AD shifts right, at new equilibrium there is increase in price and no change in output.

aggregate demand, what will be the long-run effect on output and prices?

A Output increases, prices increase

B Output decreases, prices increase

C Output remains constant, prices increase

D Output increases, prices remain constant

Practice Next

More Research Questions

In the following question, two columns are given, containing three phrases each. A phrase from the first column may or may not connect with a phrase fr...

Column (1)

In each of the following questions, two columns are given containing three sentences/ phrases each. A sentence or phrase from the first column may or m...

Match Column I and Column II and choose the correct match from the given choice

Column (1)

In the question given below, three columns are given. Columns 1 and 3 contain different independent sentences (5 in each column) and column 2 contains ...

In the question, a sentence is divided into three parts; you have to connect the sentence by using the right connector, without altering its meaning ...

In the Classical model, if there is an increase in

Solution