If the AS curve is vertical and there is a decrease in aggregate demand, the result is
A)a decrease in the price level with no change in real GDP.
B)an equal decrease in national income.
C)an increase in the price level.
D)no change in either price level or real GDP.
E)an increase in national income.

Question

Quizplus · Accepted Answer

When the AS curve is vertical, it indicates that the economy is at full capacity, and real GDP is not affected by changes in aggregate demand. A decrease in aggregate demand will lead to a lower price level, but real GDP remains unchanged.

If the AS Curve Is Vertical and There Is a Decrease