Given Aggregate Demand, a Decrease in Aggregate Supply Creates

question 89

Multiple Choice

Given aggregate demand, a decrease in aggregate supply creates:

• A) a higher price level and a higher GDP level.
• B) a lower price level and a higher GDP level.
• C) cost-push inflation.
• D) demand-pull inflation.

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Definitions:

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Cognitive Theory

A theory in psychology that emphasizes the importance of mental processes in understanding behavior, including perception, memory, and decision-making.

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