Homework: 3-2 MyEconLab: Module Thre Score: 0 of 1 pt Concept: Price Effect on L

Question

Homework: 3-2 MyEconLab: Module Thre Score: 0 of 1 pt Concept: Price Effect on LRAS How does an increase in the price level affect the quantity of real GDP supplied in the long run? O A. In the long run, an increase in the price level increases inflation, which will decrease real GDP O B. In the long run, an increase in the price level decreases inflation, which will decrease real GDP O c. Changes in the price level do not affect the level of GDP in the long run. O D. In the long run, an increase in the price level will increase real GDP Click to select your answer and then click Check Answer All parts showing

Explanation / Answer

C. Changes in price level will not affect LRAS. LRAS is a vertical line at the potential output level. Any price changes will not cause an increase in output, it causes a movement along the LRAS.

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