Answer: Price level decreases and output increases in short- run aggregate.
Explanation:
Short-run aggregate can be defined as the decrease in the price level. It affects the production costs and also include the taxes in the product cost. The price of subsides, price of labor or wages and price of raw materials remain unaffected by this. Output also increases in this. So in case of short run impact of the recession the output increases and prices of goods and services decreases.
