A large trading country, country X, is initially in equilibrium at the full-employment level of real output. It then experiences a recession in its main overseas markets. What are the most likely consequences of this change for country X?
- Arate of inflation: decrease; unemployment: decrease
- Brate of inflation: decrease; unemployment: increase
- Crate of inflation: unchanged; unemployment: decrease
- Drate of inflation: unchanged; unemployment: increase