The economy begins in a long-run equilibrium. Then something causes AD to decrease. What would result after this decrease in the short-run? O inflation and a recession O inflation and an expansion O deflation and a recession O deflation and an expansion

The economy begins in a long-run equilibrium. Then something causes AD to decrease. What would result after this decrease in the short-run? O inflation and a recession O inflation and an expansion O deflation and a recession O deflation and an expansion

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter33: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 4CQQ

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Question

The economy begins in a long-run equilibrium. Then something causes AD to decrease.
What would result after this decrease in the short-run?
O inflation and a recession
O inflation and an expansion
O deflation and a recession
O deflation and an expansion

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