How would you describe a typical recession using an aggregate demand--aggregate supply graph?

Supply decreases, shifts left.

Demand increases, shifts right

Supply increases, shifts right

None of the answers

Demand decreases, shifts left

Solutions

Expert Solution

Correct Answer:

Recession is identified by decrease in aggregate demand and AD curve shifts to the left. It leads to decrease in real output, price level and unemployment rate also increases.

Rahul Sunny answered 1 year ago

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