Question: In the short run, a decrease in aggregate demand will cause the price level to ______ and real GDP to ______. (A) decrease; decrease (B)

In the short run, a decrease in aggregate demand will cause the price level to ______ and real GDP to ______.

(A) decrease; decrease

(B) decrease; increase

(C) remain unchanged; decrease

(D) increase; decrease

(E) increase; increase

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Introduction To Microeconomics Questions!

Q:

If prices are sticky in the short run, a decrease in aggregate demand will lead to O A. either an increase or a decrease in real GDP, depending on whether expectations are rational. O B. no change in...

Q:

\fW H AT I S E C O N O M I C S ? 457 C h a p t e r 1 4 MONETARY POLICY* * 457 Monetary Policy Objectives The Federal Reserve Act: there are 3 main goals of Monetary Policy: Goals: The goals in the...

Q:

Please help...thank you! PART A - MULTIPLE CHOICE QUESTIONS 1. Real GDP is nominal GDP adjusted for: A) double counting. B) changes in prices. C) population. D) imports. 2. What do a rubbernecking...

Q:

thanks in advance PART A - MULTIPLE CHOICE QUESTIONS 1. Real GDP is nominal GDP adjusted for: A) double counting. B) changes in prices. C) population. D) imports. 2. What do a rubbernecking traffic...

Q:

1. A contractionary fiscal policy would cause the _________. Select one: a.aggregate demand curve to the right b.short-run aggregate supply curve to the left c.short-run aggregate supply curve to the...

Q:

A marginal propensity to consume (MPC) of 0.80 means: 1. people spend $0.20 of every new $1 they receive. 2. people spend $0.80 of every new $1 they receive. 3. people spend $1 of every new $0.80...

Q:

1. Describe the impact of inflationary and recessionary gaps p.233 and the lump sum tax of $15 billion with a MPC of 3/5 p. 231 on the domestic economy. 2. Complete # 2, 6, and 9 of Problems at the...

Q:

help please section 1 Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in recession. a) using a correctly labeled graph of the long run aggregate...

Q:

Some key things about policies, interest rates and exchange rates to remember: 1. Factors that shift the demand for a currency (such as the demand for that country's goods, services, or assets) and...

Q:

PART A - MULTIPLE CHOICE QUESTIONS 1. Real GDP is nominal GDP adjusted for: A) double counting. B) changes in prices. C) population. D) imports. 2. What do a rubbernecking traffic jam and the paradox...

Q:

In Problem 24.38, if the (x, y) coordinates in meters of two points on the centerline of the tangents are (262.066, 384.915) and (378.361, 476.370), what are the coordinates of the PC, PT, and the...

Q:

The phospholipids of the cell membrane have a polar hydrophilie (water- loving/attracting) head and two nonpolar hydrophobic (water- fearing/repelling) tails. The head of a phospholipid is made of a...

Q:

A block B with a mass m can slide freely on a frictionless arm OA that rotates in a horizontal plane at a constant rate 0 Knowing that B is released at a distance r0 from O express as a function of r...

Q:

What tests must be met to qualify a loss as deductible under the casualty loss provisions? Discuss the application of each of these tests.