If There Is Speculation That the Economy Will Soon Enter

question 36

Multiple Choice

If there is speculation that the economy will soon enter a recession, which means that our incomes will probably fall, then the immediate effect on the economy now will be that the

• A) aggregate supply curve will shift to the left.
• B) aggregate demand curve will shift to the right.
• C) price level will rise and real output will rise.
• D) price level will fall and real output will fall.