A shifts in aggregate demand affect the price level in the both the short and long run. The Option C is correct
Basically, an aggregate demand refers to the measurement of the total amount of demand for all finished goods and services produced in an economy. It is expressed as total amount of money exchanged for those goods and services at a specific price level and point in time.
In the short run, a shifts in aggregate demand cause fluctuations in the economy's output of goods and services. In the long run, shifts in aggregate demand affect the overall price level but do not affect output.
In conclusion, as the policymakers influence an aggregate demand, they can also potentially mitigate the severity of economic fluctuations.
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