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$01$ pts

$100$

Question $12$ of $21$

Given your knowledge of how aggregate supply changes from the very short run to the long run, what is the LONGRUN impact of a decrease in aggregate demand?

There is a recession as output falls sharply, and prices will not have had time to adjust.

There is a slow fall in prices as the short$-$run aggregate supply begins to have a positive slope, and the initial decline in output will increase.

There is a sharp fall in prices in the economy as business hurriedly lower prices to try to boost sales.

All prices adjust, and the economy returns to long$-$run potential.