-In the above figure, start with the economy in equilibrium at point A. Then an unanticipated reduction in aggregate demand triggers a shift from AD₁ to AD₂. In the short run, this would cause

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In the short run, an unanticipated reduction in aggregate demand will cause the price level to fall, real GDP to fall, and the rate of unemployment to increase. This is because firms will be producing less output at the lower price level, and workers will be laid off as a result.

-In the Above Figure, Start with the Economy in Equilibrium