If Aggregate Demand Decreases, And, as a Result, Real Output

question 224

Multiple Choice

If aggregate demand decreases, and, as a result, real output and employment decline but the price level remains unchanged, it is most likely that

• A)the money supply has declined.
• B)the price level is inflexible downward and a recession has occurred.
• C)cost-push inflation has occurred.
• D)productivity has declined.

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