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_ _____ and short-run aggregate supply will ______.
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B. decrease, increase.
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Answer: B
Explanation:
The economy is in a recession since its short-run equilibrium is less than the long-run capacity. This will lead to falling resource prices, and thus an outward shift of the short-run aggregate supply curve until full employment output is restored at the intersection of the aggregate demand curve and the long-run aggregate supply curve.
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