Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Economic recession
B
Inflationary pressure
C
Market equilibrium
D
Increased unemployment
Understanding the Answer
Let's break down why this is correct
Answer
Aggregate demand shifts represent changes in the total demand for goods and services in an economy, which can help drive economic recovery. When aggregate demand increases, it often leads to more production, job creation, and overall growth. On the other hand, supply shifts relate to changes in the total amount of goods and services that producers are willing to sell. If supply increases, it can lead to lower prices and increased availability of products, but if supply decreases, it can cause shortages and higher prices. For example, if a new technology makes it easier for farmers to grow crops, the supply of food increases, which can help stabilize prices and support economic growth.
Detailed Explanation
When supply decreases, prices tend to rise. Other options are incorrect because Some might think that supply shifts always lead to a recession; People may confuse supply shifts with reaching balance in the market.
Key Concepts
Aggregate demand shifts
Supply shifts
Economic impacts
Topic
Graphing Economic Impacts
Difficulty
hard level question
Cognitive Level
understand
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