Suppose that a decrease in the demand for goods and services pushes the economy into a recession. In your own words, explain what happens to the price level and real GDP? Explain how the economy will eventually get back to the potential output?

Suppose that a decrease in the demand for goods and services pushes the economy into a recession. In your own words, explain what happens to the price level and real GDP? Explain how the economy will eventually get back to the potential output?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter10: Bringing In The Supply Side: Unemployment And Inflation?

Section: Chapter Questions

Problem 1DQ

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Question

Suppose that a decrease in the demand for goods and services pushes the economy into a
recession. In your own words, explain what happens to the price level and real GDP? Explain
how the economy will eventually get back to the potential output?

Definition Video Definition Overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period. Video

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