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Macroeconomics

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Decrease in an Input Price

MACRO-VYPGBW

Following the decrease in the price of a key input, which of the following is true?

A

SRAS will decrease, raising the price level.

B

SRAS will increase, reducing the rate of unemployment.

C

AD will decrease and AS will increase, lowering the price level.

D

If AD is downward sloping there will be no increase in employment.

E

Both real GDP and the price level will increase.