If policymakers decrease aggregate demand,then in the short run the price level
A)falls and unemployment rises.
B)and unemployment fall.
C)and unemployment rise.
D)rises and unemployment falls.

Question

Quizplus · Accepted Answer

Decreasing aggregate demand will lead to a decrease in both output and prices in the short run. This implies a decrease in demand for goods and services, which will lead to a decrease in employment, ultimately resulting in an increase in unemployment.

If Policymakers Decrease Aggregate Demand,then in the Short Run the Price