If the economy adjusts through the automatic mechanism, then a decline in aggregate demand causes O A. an expansion in the short run and a decline in the price level in the long run. O B. an expansion in the short run and an increase in the price level in the long run. O C. a recession in the short run and a decline in the price level in the long run. O D. a recession in the short run and an increase in the price level in the long run. If the economy is initially at full-employment equilibrium, then an increase in aggregate demand causes in real GDP in the short run and in the price level in the long run. O A. a decrease; an increase O B. a decrease; a decrease O C. an increase; a decrease O D. an increase; an increase Which of the following is usually the cause of stagflation? O A. an increase in investment as a result of a reduction in interest rates B. a reduction in government purchases O C. a supply shock as a result of an unexpected increase in the price of a natural resource O D. a decline in net exports as a result of a change in the exchange rate