If Aggregate Demand Decreases and Neither Short- Run nor Long-

question 95

Multiple Choice

If aggregate demand decreases and neither short- run nor long- run aggregate supply changes, then

• A) there will be an inflationary gap.
• B) there will be a recessionary gap.
• C) in the long run, the long- run aggregate supply will decrease.
• D) the price level will increase in the short- run and decrease in the long- run.

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