Explain What Happens in the Long-Run Aggregate Demand-Aggregate Supply Model

question 7

Essay

Explain what happens in the long-run aggregate demand-aggregate supply model when there is a recession.Assume that the economy is initially at the full-employment level of real GDP.

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Definitions:

Convergent Thinking

Thinking that produces one correct answer; characteristic of the kind of thinking required on conventional intelligence tests.

General Intelligence

The theory that a single, general intelligence factor underlies all cognitive abilities, allowing individuals to perform a wide range of cognitive tasks.

Correct Answer

An accurate response or solution to a particular question or problem.

Mental Retardation

An outdated and insensitive term formerly used to describe individuals with below-average intellectual functioning and significant limitations in adaptive behaviors; now more commonly referred to as intellectual disability.