Question

Assume that the economy is in​ long-run equilibrium with complete information and that input prices adjust rapidly to changes in the prices of goods and services. If there is a sudden rise in the price level induced by an increase in aggregate​ demand, real GDP will ▼ increase not change decrease .

Answer 1

No change

Step-by-step explanation:

If an economy is in long-run equilibrium which means the economy will adjust itself and will adjust rapidly. Overall, if there is a change in the price level due to the increase in aggregate demand, the overall real GDP will remain the same. The GDP is the gross domestic product which will change if there is a variation in the overall domestic production.