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AP® Macroeconomics

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Moderate

Impact of Aggregate Demand Decrease

APMACR-JD9LC4

As the price level decreases due to a decrease in aggregate demand, all will occur in the short-run EXCEPT which of the following?

A

Unemployment will increase.

B

Real wages will decline.

C

Deflation will occur.

D

Excess capacity will be created.

E

Real gross domestic product will decrease.