Consider an Economy Starting from a Position of Full Employment

Multiple Choice

Consider an economy starting from a position of full employment.Which one of the following changes does not occur as a result of a decrease in aggregate demand?

A) A recessionary gap arises.
B) Factor prices decrease in the long run, shifting the short- run aggregate supply curve rightward.
C) The level of real GDP decreases in the short run.
D) The long- run aggregate supply curve shifts leftward to create the new long- run equilibrium.
E) The price level decreases.