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Which of the following is a consequence of unexpected lower total spending in the short-run when prices are sticky?

User Chrona
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Final answer:

A consequence of unexpected lower total spending in the short-run when prices are sticky is the presence of unemployment and recession.

Step-by-step explanation:

A consequence of unexpected lower total spending in the short-run when prices are sticky is the presence of unemployment and recession. When total spending decreases and prices are sticky, such as with sticky wages in the labor market or sticky prices in the goods market, the quantity demanded of labor and goods decreases, leading to an excess supply of labor and goods. This results in unemployment and recession as the quantity demanded is substantially less than the quantity supplied.

User Deepak Srinivasan
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