Keynesian Analysis Indicates That an Unexpected Decline in Aggregate Demand

Multiple Choice

Keynesian analysis indicates that an unexpected decline in aggregate demand will lead to

A) a reduction in inventories and an expansion in employment.
B) an increase in inventories and a reduction in output.
C) lower interest rates, which will stimulate aggregate demand and keep the economy at full employment.
D) a lower price level, which will quickly guide the economy to full-employment equilibrium.