Use the Following Graph to Answer the Following Questions

question 81

Multiple Choice

Use the following graph to answer the following questions.The graph depicts an economy where aggregate demand has decreased.Note that long-run aggregate supply remains changed.

-The graph shows a decrease in the price level due to a decrease in aggregate demand.Real gross domestic product (GDP) ,however,does not change.The best explanation for the events depicted on this graph is that

• A) the economy tends to be unstable and experiences high levels of unemployment.
• B) most recessions are caused by changes in aggregate supply.
• C) changes in aggregate demand are always positive.
• D) the government plays a major role in promoting economic stability.
• E) the economy quickly adjusts to changes in aggregate demand and remains at full employment.

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Definitions:

Information Processing

A cognitive approach that emphasizes the way people encode, store, process, and retrieve information.

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The mental activities and cognitive processes that occur within awareness, allowing for intentional thought and decision-making.

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The process of dealing with or managing two or more issues at the same time.

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