The economy experiences both ________ and ________ when aggregate supply decreases and aggregate demand remains unchanged.

Question

Quizplus · Accepted Answer

When aggregate supply decreases and aggregate demand remains unchanged, the economy experiences inflation as the prices of goods and services increase due to the shortage of supply. This can also lead to a decrease in employment opportunities, which results in higher unemployment rates. Therefore, option B is the correct answer as it correctly identifies both the consequences of a decrease in aggregate supply.

The Economy Experiences Both ________ and ________ When Aggregate Supply

The Economy Experiences Both and When Aggregate Supply