Which of the following will most likely occur in the short run when the long-run equilibrium of an economy is disturbed by an unanticipated decrease in aggregate demand?
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A. B. C. D.Explanation
In response to a decline in aggregate demand, resources may be inflexible; that is, they may not decline sufficiently to adjust to the reduction in aggregate demand. As a result, there will be a recession in which output declines and prices in other markets decline.