If an economy is currently operating at its potential level of real GDP,an increase in aggregate demand will

A) increase the price level.
B) decrease the price level.
C) cause stagflation.
D) produce long-run economic growth.

Potential Level

The highest level of economic output that an economy can sustain over a long period without increasing inflation.

Real GDP

Gross Domestic Product adjusted for inflation, showing the value of all goods and services produced over a specific time period in real, inflation-adjusted terms.