Unless the aggregate supply curve is vertical,decreases in aggregate demand tend to

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Decreases in aggregate demand tend to result in decreases in GDP, as firms produce and sell fewer goods and services, leading to a decrease in economic activity. This is due to the fact that the aggregate supply curve is typically upward-sloping, meaning that as demand decreases, prices and wages adjust downward, causing firms to reduce output in response to lower profitability. Inflation is unlikely to occur when demand is falling, as there is less pressure on prices to rise. The interest rate may rise or fall depending on the actions of the central bank, but this is not necessarily related to changes in demand alone. Increases in real output are unlikely to occur when demand is falling, as firms are producing less. Finally, unemployment may rise or fall depending on the extent to which firms lay off workers in response to lower demand.

Unless the Aggregate Supply Curve Is Vertical,decreases in Aggregate Demand