Refer to the ﬁgure. Assuming this market is representative of the economy as a whole, a negative demand shock will
A) cause inﬂation.
B) increase unemployment.
C) lower prices but leave output unaffected.
D) reduce both prices and output.

Question

Refer to the ﬁgure. Assuming this market is representative of the economy as a whole, a negative demand shock will
A) cause inﬂation. 
B) increase unemployment. 
C) lower prices but leave output unaffected. 
D) reduce both prices and output.

Quizplus · Accepted Answer

The Answer of  Refer to the ﬁgure. Assuming this market is representative of the economy as a whole, a negative demand shock will
A) cause inﬂation. 
B) increase unemployment. 
C) lower prices but leave output unaffected. 
D) reduce both prices and output.

Refer to the ﬁGure