Based on the graph showing a contractionary policy response to a negative supply shock, a decrease in aggregate demand leads to ______.
a. increased inflation and decreased unemployment
b. increased output and prices, and decreased unemployment
c. decreased output and prices, and increased unemployment
d. increased output and increased prices
c. decreased output and prices, and increased unemployment
Economics
You might also like to view...
What is eminent domain and what gives the government the authority to exercise eminent domain?
What will be an ideal response?
Economics
The possibility that unanticipated policy changes are an important source of output fluctuations is most consistent with ________
A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) institutionalist theory
Economics