An economy is in short-run equilibrium at a level of output that is greater than potential output. If there were no active fiscal or monetary policy intervention, which of the following changes in output and the price level would occur in the long run? Output Price Level (A) Increase Decrease (B) Increase Increase (C) Decrease Decrease (D) Decrease Increase (E) No change No change

Respuesta :

An economy is in short-run equilibrium and there were no active fiscal or monetary policy intervention, the output will increase and the price level would decrease occur in the long run. Option A is correct.

What is economy?

An economy is a collection of interconnected processes of manufacturing and consumption that eventually decide how resources are distributed within a community. The whole production and use of goods and services meets the demands of those residing in and using it.

The science of economy focuses on the analysis of resource scarcity. It examines variables that have an impact on how products and services are produced, distributed, and consumed in an economy. It investigates how people, businesses, and governments distribute limited resources.

Therefore option A is correct.

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