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

question 169

Multiple Choice

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

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

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