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

question 256

Multiple Choice

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

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

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Definitions:

Femoral Artery

The major blood vessel supplying blood to the thigh and lower leg, originating from the external iliac artery.

Thoracic Visceral Artery

Blood vessels that supply blood to the organs within the thoracic cavity, such as the lungs and esophagus.

Stomach

A digestive organ that breaks down food, mixing it with gastric juices to begin the digestion process.

Liver

A vital organ in the human body that performs essential functions like detoxification, protein synthesis, and production of biochemicals necessary for digestion.