If the Economy Experiences Simultaneous Negative Aggregate Demand and Aggregate

question 84

Multiple Choice

If the economy experiences simultaneous negative aggregate demand and aggregate supply shocks,and the Fed decides NOT to intervene with expansionary policy.Short-run aggregate supply will eventually shift back to the right,which will eventually bring the economy

• A) back to potential GDP at a lower price level.
• B) back to potential GDP at a higher price level.
• C) back to the original equilibrium price at a lower level of aggregate output.
• D) back to the original equilibrium price at a higher level of aggregate output.

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Definitions:

Social Media

Digital platforms and technologies that enable users to create, share, or exchange information, ideas, and content in virtual communities and networks.

Fossil Fuel

Natural fuels formed from the remains of ancient plants and animals, including coal, oil, and natural gas, which are used for energy.

Atmosphere

The envelope of gases surrounding the Earth or another planet, crucial for life as it provides air and protection from solar radiation.

Interconnection

The linked state or being where different elements, systems, or entities are connected or interact, fostering a state of mutual dependence or influence.