When the aggregate demand in an economy falls, there is a downward movement along the short- run Philips curve.

Name: When the aggregate demand in an economy falls, there is a downward movement along the short- run Philips curve.
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A fall in aggregate demand causes a reduction in output and employment, leading to a movement along the short-run Philips curve, resulting in lower inflation and higher unemployment.

When the Aggregate Demand in an Economy Falls, There Is