If you're seeing this message, it means we're having trouble loading external resources on our website.

If you're behind a web filter, please make sure that the domains *.kastatic.org and *.kasandbox.org are unblocked.

To log in and use all the features of Khan Academy, please enable JavaScript in your browser.

Main content

Course: AP®︎/College Macroeconomics > Unit 3

Lesson 7: Long run self-adjustment

© 2024 Khan AcademyTerms of use Privacy Policy Cookie Notice

Long run self-adjustment in the AD-AS model

Google Classroom

The economy of Maxistan experienced a positive aggregate demand (AD) shock due to unbridled consumer optimism.

What will be the effect of this AD shock on Maxistan’s level of output and unemployment rate in the long run?

(Choice A)
Output will be unaffected; unemployment will decrease.
(Choice B)
Output will increase; unemployment will decrease.
(Choice C)
Output will be unaffected; unemployment rate will be unaffected.
(Choice D)
Output will increase; unemployment will increase.
(Choice E)
Output will increase; unemployment rate will be unaffected.