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Which of the following best describes the short-run adjustments to a negative demand shock?

A. AD shifts right, causes a recession, increased unemployment rate, decreased output.
B. AD shifts left, causes a recession, increased unemployment rate, decreased output.
C. AS shifts right, causes inflation, decreased unemployment rate, increased output.
D. AS shifts right, long-run equilibrium, full employment, increased output.



Answer :

GinnyAnswer

Final answer:

In response to a negative demand shock, short-run adjustments involve a leftward shift of the AD curve leading to a recession, increased unemployment rate, and decreased output.


Explanation:

In the context of a negative demand shock, the short-run adjustments involve a leftward shift of the AD curve. This shift leads to a recession, increased unemployment rate, and decreased output in the economy.


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