One possible result of a fall in aggregate demand coupled with a stable aggregate supply is
A)a recession.
B)an increase in employment levels.
C)an economic expansion.
D)a rise in the stock market.

Question

Quizplus · Accepted Answer

A fall in aggregate demand means that consumers and businesses are spending less, which can lead to a contraction in the economy. If aggregate supply remains stable, this means that the production of goods and services is not changing, but since demand is lower, there will be a surplus of goods and services, leading to lower prices and possibly decreased production. This can lead to businesses laying off workers and decreased economic activity, which are hallmarks of a recession.

One Possible Result of a Fall in Aggregate Demand Coupled