The 2007-2009 recession can be shown as a combination of a(n) _____ in aggregate demand and _____ in the short-run aggregate supply.

Question

Quizplus · Accepted Answer

During the 2007-2009 recession, there was a decrease in aggregate demand due to factors such as a decline in consumer spending and investment. Additionally, there was a decrease in short-run aggregate supply due to a decrease in productivity and higher unemployment, which led to higher wages and higher costs of production. Together, the decrease in aggregate demand and decrease in short-run aggregate supply contributed to the severity of the recession.

The 2007-2009 Recession Can Be Shown as a Combination of A(n)