Question: Suppose that a decrease in the demand for goods and services pushes the economy into recession. What happens to the price level? Describe the situation

Suppose that a decrease in the demand for goods and services pushes the economy into recession. What happens to the price level? Describe the situation of the economy in the short run. If the government does nothing, what ensures that the economy still eventually gets back to the natural rate of output (e.g., full employment output)? Describe the adjustment to the long run equilibrium. Explain with words + graph.

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