When will a decrease in aggregate demand not result in a lower ...

[james]

When will a decrease in aggregate demand not result in a lower inflation rate in the short run?
 
  What will be an ideal response?

Question 2

Over the last three decades in the United States, services have become a smaller fraction of GDP relative to goods.
 
  Indicate whether the statement is true or false

[Chou]

Answer to Question 1

A decrease in aggregate demand will not result in a lower inflation rate in the short run if there is no change in the price level as a result of the decrease in aggregate demand. If, for example, aggregate supply decreases and potential GDP decreases at the same time that aggregate demand is decreasing, the inflation rate may remain unchanged.

Answer to Question 2

FALSE

[james]

TYSM

[epscape]

Wow, this really help