In the short run,a negative AD shock will cause the growth rate of output to:
A) increase.
B) decrease.
C) remain unchanged.
D) become more volatile.

Question

Quizplus · Accepted Answer

In the short run, a negative AD shock will cause a decrease in the growth rate of output. This is because a negative AD shock will lead to a decrease in aggregate demand, causing firms to decrease production and lay off workers, thus reducing output.

In the Short Run,a Negative AD Shock Will Cause the Growth