Suppose that many of our trading partners in Europe sink into recession. In the short run, output in the
United States will ________ and the price level will ________.
A) increase; increase
B) decrease; decrease
C) remain unaffected; remain unaffected
D) decrease; remain unaffected
E) increase; remain unaffected

Question

Quizplus · Accepted Answer

A recession in Europe would likely lead to a decrease in demand for U.S. exports, reducing U.S. output and leading to a decrease in the price level in the short run.

Suppose That Many of Our Trading Partners in Europe Sink