Answer:
a. a decrease in AD and an increase in AS; fall in the price level and the decrease in real GDP
Explanation:
During a recession, the aggregate demand is the first to decrease. As a result of lower demand, inventories will increase resulting in an increase in the aggregate supply. Recessions tend to decrease inflation, which results in lower price levels and an overall decrease in real GDP. Recessions will continue until the aggregate demand increases again, increasing the aggregate supply.
