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According to Keynesian economics, if there are unutilized resources in the economy and aggregate demand decreases


According to Keynesian economics, if there are unutilized resources in the economy and aggregate demand decreases 

1) real GDP will rise and price level will fall. 

2) real GDP will fall and price level will remain constant. 

3) real GDP will rise and price level will remain constant. 

4) real GDP will rise and price level will rise.

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Answer #1

Ans) the correct option is 2) real GDP will fall and price level will remain constant

in keynesian economics, aggregate supply is horizontal so there will be no change in price but real GDP decreases

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