Over the long run, a surge in aggregate demand from a neoclassical perspective will most likely result in: a rise in level of output. an increase in price level. downward pressure on the price level. pressure for a lower level of inflation.

Question

Taylor Henry

Business

21 January, 10:12

Over the long run, a surge in aggregate demand from a neoclassical perspective will most likely result in: a rise in level of output. an increase in price level. downward pressure on the price level. pressure for a lower level of inflation.

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Kimora Mercer · Answer 1

an increase in price level.

Explanation:

When the demand for a product increases, it brings about an increase in price level because the producers see this as an avenue to stir up profit. They realize that their products are being sought after which is an indicator that customers overtime have validated the quality of that product, trust has now been established and a surge in price level will not deter the product demand in the market.