If an Unanticipated Reduction in Aggregate Demand Throws a Market

Multiple Choice

If an unanticipated reduction in aggregate demand throws a market economy into a recession,

A) market forces will cause the economy to spiral downward and a lengthy period of depressed conditions is the expected result.
B) lower real resource prices and interest rates will act as a stabilizing force and direct the economy back to its full employment potential.
C) higher real resource prices and interest rates will help to direct a market economy back to its full employment potential.
D) the natural rate of unemployment will rise until it is once again equal to the actual rate of unemployment.