If an active approach is followed in closing an expansionary gap,_____.
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 up and to the left along the short-run supply curve

Question

Quizplus · Accepted Answer

To close an expansionary gap using an active approach, the goal is to decrease aggregate demand to reduce inflationary pressures. This is achieved by shifting the aggregate demand curve leftward, not by moving along the supply curve or shifting the supply curve itself.

If an Active Approach Is Followed in Closing an Expansionary