Expansionary and contractionary gaps are automatically eliminated by shifts in aggregate demand.

Name: Expansionary and contractionary gaps are automatically eliminated by shifts in aggregate demand.
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Question

Quizplus · Accepted Answer

Expansionary and contractionary gaps can be influenced by shifts in aggregate demand, but they are not automatically eliminated by these shifts. Other factors, including fiscal and monetary policy interventions, are often required to fully close these gaps.

Expansionary and Contractionary Gaps Are Automatically Eliminated by Shifts in Aggregate