A decrease in aggregate demand results in a(n)________ in the ________.
A)recession; long run
B)expansion; long run
C)expansion; short run
D)recession; short run

Question

Quizplus · Accepted Answer

A decrease in aggregate demand will lead to a decrease in output and employment in the short run, resulting in a recession. In the long run, the economy will adjust to the lower level of demand, but in the short run, there will be a decrease in economic activity.

A Decrease in Aggregate Demand Results in A(n)________ in the ________

A Decrease in Aggregate Demand Results in A(n) in the