A decrease in an economy's output and prices would suggest a:
A) decrease in aggregate demand.
B) increase in aggregate demand.
C) decrease in short-run aggregate supply.
D) increase in short-run aggregate supply.

Question

Quizplus · Accepted Answer

A decrease in an economy's output and prices typically indicates a decrease in aggregate demand, as less spending by households, businesses, and the government reduces the overall demand for goods and services, leading to lower production and prices.

A Decrease in an Economy's Output and Prices Would Suggest