If weak aggregate demand is pushing the economy into recession,which of the following must be true?

Question

Quizplus · Accepted Answer

Weak aggregate demand implies a situation where the demand for goods and services is not high enough to meet the level of supply, which leads to a decline in overall economic activity. This typically occurs when the economy is operating below potential output. If the economy were at an equilibrium on the long-run Phillips curve, it would imply that there is no trade-off between inflation and unemployment, which may not be the case in a recession. Similarly, contractionary monetary policies may not be effective in pushing the economy back to the long-run Phillips curve as they may further reduce demand and aggravate the recession. Therefore, it is most likely that the economy is at an equilibrium that is not on the long-run Phillips curve.

If Weak Aggregate Demand Is Pushing the Economy into Recession,which