A Central Idea Behind the AD-AS Model Is That,during a Recession,the

Multiple Choice

A central idea behind the AD-AS model is that,during a recession,the price level will decline,which will boost aggregate demand and,thus,eliminate the recessionary gap without requiring any help from government policies.The decline in the price level is expected to boost aggregate demand because of

A) the real-balances effect on consumption.
B) the price effect.
C) the foreign trade effect on net exports.
D) the Fisher effect.
E) a combination of the real-balances effect and the foreign trade effect.