An economy in which output has decreased and prices have decreased would suggest a:
A) decrease in aggregate demand.
B) increase in aggregate demand.
C) decrease in short-run aggregate supply.
D) increase in short-run aggregate supply.

Question

Quizplus · Accepted Answer

A decrease in aggregate demand leads to lower output and lower prices, as there is less demand for goods and services in the economy.

An Economy in Which Output Has Decreased and Prices Have