Multiple Choice
Suppose an economic contraction occurs, due to a shift in aggregate demand.How will prices change, assuming no government intervention?
A) Prices will rise in the short run, and rise even more in the long run.
B) Prices will rise in the short run, and fall back to their original level in the long run.
C) Prices will fall in the short run, and fall even more in the long run.
D) Prices will fall in the short run, and rise back to their original level in the long run.
Correct Answer:

Verified
Correct Answer:
Verified
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