In the short run, the decrease in investment spending associated with business pessimism causes the price level to

Question

Arely Griffith

Business

1 March, 16:48

In the short run, the decrease in investment spending associated with business pessimism causes the price level to

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Jessie Hanson · Answer 1

In the short run the decrease in the investment spending associated with business pessimism will cause the price level to fall below

Explanation:

Due to this the price level and that the people expect and the quantity of the output will sharply fall below the natural level of the output the business pessimism will cause the markets to be down and it will increase the problem of unemployment

There will a natural increase in the problem of unemployment in the short run hence the decrease in the investment spending associated with business pessimism will cause the price level to decrease