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Homework answers / question archive / Suppose the inflation rate remains relatively constant while output decreases and the unemployment rate increases
Suppose the inflation rate remains relatively constant while output decreases and the unemployment rate increases. This is possible? if:
A. both the aggregate supply and demand curves shift horizontally to the right by the same amount.
B. both the aggregate supply and demand curves shift horizontally to the left by the same amount.
C. the aggregate supply curve shifts to the left and the aggregate demand curve remains the same.
D. the aggregate supply curve shifts to the left and the aggregate demand curve shifts to the right.
Correct option is B). Both the aggregate supply and demand curves shift horizontally to the left by the same amount
