If the AS curve is vertical and there is a decrease in aggregate demand,the result is
A)a decrease in the price level with no change in real GDP.
B)an equal decrease in national income.
C)an increase in the price level.
D)an increase in national income.
E)no change in either price level or real GDP.

Question

Quizplus · Accepted Answer

When the AS curve is vertical, it means that the economy has reached its full potential output level and any decrease in aggregate demand will only lead to a decrease in the price level without affecting real GDP. Therefore, the best choice is A - a decrease in the price level with no change in real GDP.

If the AS Curve Is Vertical and There Is a Decrease