Which of the following will occur if aggregate demand is below full-employment GDP?
A) Recession
B) Excessive aggregate demand
C) Inflation
D) A stable economy

Question

Quizplus · Accepted Answer

If aggregate demand is below full-employment GDP, it means that there is not enough demand in the economy to utilize all available resources, leading to a decrease in production, income, and employment. This situation is known as a recession, which is characterized by a prolonged period of economic contraction, declining output, and rising unemployment.

Which of the Following Will Occur If Aggregate Demand Is