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Answer: Firms' inventories will increase, causing them to cut production. Ultimately, real GDP will decrease and unemployment will increase
Explanation:
A negative demand shock simply means when there is a reduction in demand.
If prices are sticky in the short-run, the economy's response to a negative demand shock will be that there'll be an increase in the firms' inventories, causing them to cut production. Ultimately, real GDP will decrease and unemployment will increase.