As aggregate demand shifts left along the shortrun aggregate

As aggregate demand shifts left along the short-run aggregate supply curve,

A)inflation and unemployment are higher.

B)unemployment is higher and inflation is lower.

C)inflation is higher and unemployment is lower.

D)unemployment and inflation are lower.

Solution

Answer:- As aggregate demand shifts left along the short-run aggregate supply curve,

Correct option:- B:- unemployment is higher and inflation is lower.

Reason:- The lower level of output in the aggregate-supply/aggregate-demand diagram corresponds to the higher unemployment rate and lower inflation.