If the Economy Was Initially at a Long-Run Equilibrium, the Short-Run

question 89

Multiple Choice

If the economy was initially at a long-run equilibrium, the short-run effects from a decrease in aggregate demand will include:

• A)a recessionary gap.
• B)a decrease in potential output.
• C)an increase in the current inflation rate.
• D)a decrease in the target rate of inflation.

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