Question

Concept: Price Effects on LRAS

Concept: Price Effect on LRAS Question Help How does an increase in the price level affect the quantity of real GDP supplied in the long run? Long-Run Aggregate Supply (LRAS) O A. In the long run, an increase in the price level will increase real GDP. O B. Changes in the price level do not affect the level of GDP in the long LRAS7 LRAS, LRAS,9 nun O C. In the long run, an increase in the price level decreases inflation, which will decrease real GDP OD. In the long run, an increase in the price level increases inflation, which will decrease real GDP Price lerel (GDP deator) Real GDP (trillions of 5)

Answer 1

Answer
option B
The long-run GDP is a potential output that is produced using all the resources and technology in the economy so it can change if there is a change in the resources or technology or both and anything else can not change it, like price level.
The increase in inn price level does not change the potential real GDP.