Multiple Choice
Assume equilibrium real GDP per year is equal to full-employment real GDP. If aggregate demand falls, then
A) the price level will increase in the short run and decrease in the long run.
B) there will be an expansionary gap.
C) there will be a recessionary gap.
D) long-run aggregate supply will eventually decrease too.
Correct Answer:
Verified
Correct Answer:
Verified
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