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NEW QUESTION: 1
Which one of the following is most likely to accompany a reduction in aggregate demand?
A. A decrease in employment.
B. An increase in real GDP.
C. An increase in the price level.
D. A decrease in the unemployment rate.
Answer: A
Explanation:
Choice "b" is correct. As aggregate demand falls, the unemployment rate rises so employment would
decrease.
Choice "a" is incorrect. The price level would fall, not rise.
Choice "c" is incorrect. Real GDP would fall, not rise.
Choice "d" is incorrect. The unemployment rate would rise, not fall.