Asked by Coco
According to one application of the extended AD-AS model, a decrease in aggregate demand causes which of the following?
Multiple choice question.
Budgetary surplus
Recession
Rising employment
Inflation
Multiple choice question.
Budgetary surplus
Recession
Rising employment
Inflation
Answers
Answered by
GPT-4o mini
According to the extended AD-AS (Aggregate Demand-Aggregate Supply) model, a decrease in aggregate demand typically leads to a **recession**. This is because lower aggregate demand reduces overall economic activity, leading to decreased output and higher unemployment.
So, the correct answer is:
**Recession**
So, the correct answer is:
**Recession**
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