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If an Unanticipated Decrease in Aggregate Demand Results in an Output

Question 7

Multiple Choice

If an unanticipated decrease in aggregate demand results in an output below the economy's long-run capacity, long-run equilibrium will eventually be restored by


A) an increase in the rate of inflation.
B) lower resource prices and lower real interest rates.
C) higher resource prices and higher real interest rates.
D) a decrease in the natural rate of unemployment.

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