Consider an economy with a relatively steep AS curve. If the AD curve shifts to the left, then the price level will
And national output will .
A) increase slightly; significantly increase
B) increase slightly; significantly decrease
C) increase sharply; increase slightly
D) fall sharply; will not change.
E) fall sharply; decrease slightly.

Question

Quizplus · Accepted Answer

In an economy with a steep AS curve, a leftward shift in the AD curve will lead to a sharp fall in the price level and a slight decrease in national output.

Consider an Economy with a Relatively Steep AS Curve