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Suppose a recession is caused by both a fall in aggregate demand and a supply shock. What happens to real GDP in the short run?
Suppose a recession is caused by both a fall in aggregate demand and a supply shock. What happens to real GDP in the short run? Select one: a. Real GDP increases. b. Real GDP decreases. c. Real GDP may increase if the fall in aggregate demand is larger than the fall in short-run aggregate supply or decrease if the fall in aggregate demand is smaller than the fall in short-run aggregate supply. d. Real GDP may decrease if the fall in aggregate demand is larger than the fall in short-run aggregate supply or increase if the fall in aggregate demand is smaller than the fall in short-run aggregate supply
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