In the Long Run, as the Economy Self-Corrects, a Decrease

question 236

Multiple Choice

In the long run, as the economy self-corrects, a decrease in aggregate demand, all other things unchanged, will cause the price level to _____ and potential output to _____.

• A) rise; increase
• B) fall; decrease
• C) rise; remain stable
• D) fall; remain stable

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Definitions:

Meteorites

Solid pieces of debris from objects such as asteroids or comets that have made their way through the Earth's atmosphere and landed on the surface.

Continental Drift

The hypothesis, now a scientific theory, that the Earth's continents have moved over geological time relative to each other, appearing to have "drifted" across the ocean bed.

Glacial Evidence

Glacial evidence comprises physical features left on the landscape that indicate the past presence and movement of glaciers, such as striations, moraines, and glacial erratics.

Wegener's Hypothesis

The theory proposed by Alfred Wegener suggesting that continents drift across the Earth's surface through geological time, which later became known as continental drift.