If the Government Increases Aggregate Demand When the Economy Is

If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to

A) increase real Gross Domestic Product (GDP) .
B) increase the price level.
C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag.
D) decrease both real Gross Domestic Product (GDP) and the price level.

Correct Answer:

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