A reduction in aggregate demand with no trade-off between inflation and unemployment would
A) cause wages and prices to fall so that the aggregate quantity demanded would support full employment.
B) cause wages to climb and prices to fall so that the aggregate quantity demanded would support full employment.
C) cause wages and prices to climb and portend a coming recession.
D) cause wages, prices, and GDP to decline in the long run.
E) none of the above.
Correct Answer:
Verified
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