If AD decreases in the short run and the government decides to let the economy fix itself what would happen in the long run

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asked Jul 10, 2021 220k views

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Alex Stoyanov · Answer 1 · 2021-07-11T11:36:14+0000

Answer:

Step-by-step explanation:

If AD changes, then output and unemployment will change in the short run, but not in the long run. As a result, output increases and unemployment decreases. Unfortunately, this positive AD shock also means that inflation increases: An increase in AD leads to an increase in real GDP and the price level.

If AD decreases in the short run and the government decides to let the economy fix itself what would happen in the long run

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