how-does-a-reduction-in-aggregate-supply-affect-aggregate-demand-and-employment-

Question

How does a reduction in aggregate supply affect aggregate demand and employment in the Real Business Cycle Model?

Accepted Answer

It leads to a reduction in aggregate demand and employment.

Answer

It leads to an increase in government spending.

Answer

It has no effect on aggregate demand and employment.

Answer

It leads to an increase in aggregate demand and employment.