A recovery phase is explained by
A) rightward shifts of the short-run aggregate supply curve in response to expansionary policies.
B) rightward shifts of the aggregate demand curve in response to expansionary policies.
C) leftward shifts of the short-run aggregate supply curve in response to higher prices.
D) leftward shifts of the aggregate demand curve in response to higher prices.

Question

Quizplus · Accepted Answer

A recovery phase is characterized by the revival of economic growth and increased demand for goods and services, which leads to rightward shifts of the aggregate demand curve in response to expansionary policies such as lower interest rates, tax cuts, and government spending. This results in increased output and employment without significant inflationary pressures.

A Recovery Phase Is Explained by