Question

When the AS curve is very steep, a decrease in AD will lead to…

a. 

an upward movement along the AS curve.

a. an upward movement along the AS curve.

b. 

higher price level and a higher level of income.

b. higher price level and a higher level of income.

c. 

a fall in the price level and little or no decrease in output and income level.

c. a fall in the price level and little or no decrease in output and income level.

d. 

a fall in the price level and no change in output and income.

Answer 1

c. 

a fall in the price level and little or no decrease in output and income level.