According to aggregate demand and supply analysis,the negative demand shock of 2000-2004 had the effect of
A)increasing aggregate output,lowering unemployment,and raising inflation.
B)decreasing aggregate output,raising unemployment,and raising inflation.
C)increasing aggregate output,lowering unemployment,and lowering inflation.
D)decreasing aggregate output,raising unemployment,and lowering inflation.

Question

Quizplus · Accepted Answer

A negative demand shock typically leads to a decrease in aggregate output and an increase in unemployment as businesses respond to reduced demand by scaling back production and potentially laying off workers. Additionally, the reduced demand for goods and services often leads to lower inflation rates, as there is less pressure on prices to rise.

According to Aggregate Demand and Supply Analysis,the Negative Demand Shock