Solved

Suppose an Economic Contraction Occurs, Due to a Shift in Aggregate

Question 50

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:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions