Because Decreases in Inflation Increase Aggregate Spending and Short-Run Equilibrium

question 58

Multiple Choice

Because decreases in inflation increase aggregate spending and short-run equilibrium output:

• A) the short-run aggregate supply line is downward sloping.
• B) the aggregate demand curve is horizontal.
• C) the aggregate demand curve is downward sloping.
• D) the aggregate demand curve is upward sloping.

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Definitions:

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