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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Definitions:

Communication Transparency

The practice of openly and honestly sharing information, fostering an environment of trust and openness.

Active Listener

A person who fully engages with the speaker, understands their message, provides feedback, and retains the information being communicated.

Paraphrase

Expressing the meaning of something written or spoken using different words, especially to achieve greater clarity.

Active Listener

The practice of fully concentrating on what is being said rather than passively hearing the message of the speaker.