An Economic Contraction Caused by a Shift in Aggregate Demand

question 184

Multiple Choice

An economic contraction caused by a shift in aggregate demand causes prices to

• A) rise in the short run, and rise even more in the long run.
• B) rise in the short run, and fall back to their original level in the long run.
• C) fall in the short run, and fall even more in the long run.
• D) fall in the short run, and rise back to their original level in the long run.

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Definitions:

Volatile Organic Compounds

Organic chemicals that easily vaporize at room temperature, can be sources of air pollution, and are often found in paints, cleaning supplies, and building materials.

Sunlight

The natural light emitted by the Sun, essential for photosynthesis in plants and influencing Earth's climate and weather.

Cold Front

A leading edge of a cooler mass of air, replacing at ground level a warmer mass of air, which can bring about significant changes in weather.

Onshore Breeze

A wind that blows from the sea towards the land, typically occurring during the day due to differential heating of land and sea surfaces.