An economy is initially at its long-run equilibrium. In reducing the country's carbon footprint, the government...

An economy is initially at its long-run equilibrium. In reducing the country's carbon footprint, the government now spends a lot of money on tree plantation around urban areas.

		in the short run, the aggregate demand curve shifts right. In the long run the price level increases, output returns to its potential, and real wages do not change.
		In the short run, the aggregate demand curve shifts left. In the long run, the price level decreases, output returns to its potential, and real wages decrease.
		the aggregate demand curve shifts left; the price level decreases, output returns to its potential, and real wages do not change.
		In the short run, the aggregate demand curve shifts right. In the long run, the price level increases, output returns to its potential, and real wages increase.
		In the short run, the aggregate demand curve shifts left. In the long run, the price level increases, output returns to its potential, and real wages increase.

Expert Solution

in the short run, the aggregate demand curve shifts right. In the long run the price level increases, output returns to its potential, and real wages do not change.- is correct

Rahul Sunny answered 2 years ago

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