An economy is at full employment when aggregate demand increases. Which of the following changes does not occur as a result of an increase in aggregate demand?

Question

An economy is at full employment when aggregate demand increases. Which of the following changes does  not  occur as a result of an increase in aggregate demand?

Accepted Answer

The long-run aggregate supply curve shifts rightward to create the new long-run equilibrium.

Answer

As the money wage rate rises in the long run, the short-run aggregate supply curve shifts leftward.

Answer

An inflationary gap arises.

Answer

The price level rises.

Answer

Real GDP increases in the short run.

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An economy is at full employment when aggregate demand increases. Which of the f...

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