in-the-dynamic-ad-as-model-if-both-the-short-run-and-long-run-aggregate-supply-c

Question

In the dynamic AD-AS model, if both the short-run and long-run aggregate supply curves shift to the right due to economic growth, what happens to the equilibrium GDP and price level?

Accepted Answer

Equilibrium GDP increases, and the price level remains stable.

Answer

Equilibrium GDP decreases, and the price level increases.

Answer

Equilibrium GDP remains unchanged, and the price level decreases.

Answer

Equilibrium GDP increases, and the price level decreases.