Which of the following always end up back at their natural levels at the end of the long-run?
Only prices.
Prices and output.
Prices and unemployment.
Output and unemployment.
Question 9
Does aggregate demand increase (shift to the right) in our model when workers get raises?
No, because the increase in buying by the workers is canceled out by a decrease in buying by the bosses.
Actually, aggregate demand is likely to shift to the left.
No, because most likely all of the workers will save all of that money into the cookie jar.
Yes, because obviously they will spend some of that money to buy things.
