Use the following graph to answer the next seven questions. The graph depicts an economy where aggregate demand and long-run aggregate supply (LRAS) have decreased, with no change in short-run aggregate supply (SRAS) .
-During the Great Recession,real gross domestic product (GDP) fell yet the price level was largely unchanged,as depicted in the graph.Because of this,we know that:
A) both aggregate demand and long-run aggregate supply increased during the recession.
B) aggregate demand and long-run aggregate supply both decreased during the recession.
C) aggregate demand decreased and long-run aggregate supply increased during the recession.
D) aggregate demand decreased and short-run aggregate supply increased during the recession.
E) long-run aggregate supply increased and short-run aggregate supply decreased during the recession.
Correct Answer:
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Q28: During the Great Recession,the U.S.aggregate demand curve
Q29: During the Great Recession,long-run aggregate supply decreased.This
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Q32: During the Great Recession,_ caused aggregate demand
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