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and 9. Changes in aggregate demand can cause fluctuations in in the long run. in the short run, and only

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In the short run, changes in aggregate demand changes equilibrium point in a way such that both, output as well as price level are affected, as output is adjusted accordingly in short run.

In the long run however, we assume the economy to be already operating at long run full employment level, so output does not fluctuate, and any change in aggregate demand and/or supply curve changes only the price levels.

Thus, changes in aggregate demand can cause fluctuations in output level and price in the short run, and only price in the long run.

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