if the economy is in long-run equilibrium at potential output and the money supply ______ then in the long run, prices will decrease and output will ___ g

Respuesta :

If the economy is in long-run equilibrium at potential output and the money supply increases, then in the long run, prices will increase and output will remain the same.

What is a long-run equilibrium?

This means the situation where all markets are in equilibrium and all the prices & quantities therein have been fully adjusted and in equilibrium.

Therefore, the word "increase" and "remain the same" is correct.

Read more about long run equilibrium

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