If the supply of final goods is assumed to be infinitely elastic at constant price over a short period of time, Aggregate output is determined solely by the value of Aggregate demand. This is called ___________ Principle.

Correct option is C

This scenario is known as the Principle of Effective Demand, famously articulated by John Maynard Keynes. It posits that in the short run, aggregate demand determines the total output of the economy when the supply is infinitely elastic at a given price level.