What happens to price level when aggregate demand decreases and aggregate supply is set at potential output?(Neoclassical economics)Select the correct answer below:Price level decreasesPrice level remains the samePrice level increasesNone of the above

Neoclassical economics is based on the following assumptions: Supply creates its own demand. Price…

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What happens to price level when aggregate demand decreases and aggregate supply is set at potential output? (Neoclassical economics)

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter8: Macroeconomic Equilibrium: Aggregate Demand And Supply

Section: Chapter Questions

Problem 11E

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Question

What happens to price level when aggregate demand decreases and aggregate supply is set at potential output?
(Neoclassical economics)
Select the correct answer below:
Price level decreases
Price level remains the same
Price level increases
None of the above

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