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If the Advice of Those Who Favor a Passive Approach

Question 2

Multiple Choice

If the advice of those who favor a passive approach to policy is correct, how would a contractionary gap eventually close?


A) The aggregate demand curve would shift rightward.
B) The aggregate demand curve would shift leftward.
C) The short-run aggregate supply curve would shift rightward.
D) The short-run aggregate supply curve would shift leftward.
E) There would be a movement upward along the aggregate demand curve.

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