In the long-run equilibrium, an increase in the quantity of capital leads to
A. an increase in the equilibrium price level and an increase in equilibrium real GDP.
B. a decrease in the equilibrium price level and an increase in equilibrium real GDP.
C. a decrease in the equilibrium price level, but no change in equilibrium real GDP.
D. no change in the equilibrium price level, but an increase in equilibrium real GDP.
Answer:B
In the long-run equilibrium, an increase in the quantity of capital leads to
A. an increase in the equilibrium price level and an increase in equilibrium real GDP. B. a decrease in the equilibrium price level and an increase in equilibrium real GDP. C. a decrease in the equilibrium price level, but no change in equilibrium real GDP. D. no change in the equilibrium price level, but an increase in equilibrium real GDP.