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Dynamic AD-AS Model: Introduction
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Problem 10
Dynamic AD-AS Model: Introduction
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25. Dynamic AD/AS Model / Dynamic AD-AS Model: Introduction / Problem 10
Problem 10
Why do the static assumptions of the standard AD-AS model fail to predict economic behavior during recessions?
A
They assume potential GDP decreases during recessions.
B
They assume price levels always decrease during recessions.
C
They assume aggregate demand increases during recessions.
D
They assume long-run aggregate supply shifts left during recessions.
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