When aggregate demand declines, an economy will experience _____ in the average price level and _____ in the amount of goods and services purchased.
A) a decrease; an increase
B) a decrease; a decrease
C) an increase; an increase
D) an increase; a decrease

Question

Quizplus · Accepted Answer

When aggregate demand declines, it typically leads to a decrease in the average price level due to reduced demand for goods and services, and also a decrease in the amount of goods and services purchased as businesses respond to the lower demand by producing less.

When Aggregate Demand Declines, an Economy Will Experience _____ in the Average