Suppose Housing Values Fall During a Recession

question 136

Multiple Choice

Suppose housing values fall during a recession. In the short run,

• A) the price level will fall as we move down the aggregate demand curve.
• B) the price level will fall as we move down the short-run aggregate supply curve.
• C) short-run aggregate supply will decrease and the price level will fall.
• D) short-run aggregate supply will increase because wages will fall.
• E) aggregate demand will increase because the demand for houses will increase.

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