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?

Answer

Real GDP increases in the short run.

Answer

The price level rises.

Answer

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

Answer

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

Answer

An inflationary gap arises.

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

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