Assuming an upward-sloping aggregate supply curve,when aggregate demand decreases,unemployment
A)Decreases,and the price level decreases.
B)Increases,and the price level decreases.
C)Decreases,and the price level increases.
D)Increases, and the price level increases.

Question

Quizplus · Accepted Answer

If aggregate demand decreases and assuming an upward-sloping aggregate supply curve, there will be a decrease in output and employment, leading to an increase in unemployment. Additionally, the decrease in demand will create a surplus of goods, causing firms to lower prices in order to sell their output, resulting in a decrease in the price level.

Assuming an Upward-Sloping Aggregate Supply Curve,when Aggregate Demand Decreases,unemployment