If the economy is experiencing an inflationary gap, Keynesian economists advocate allowing flexible wages to shift the short-run aggregate supply curve (SRAC) upward and restore full employment.

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Keynesian economists would not advocate for flexible wages to shift the SRAC upward in this scenario. Instead, they would suggest using expansionary fiscal and monetary policies to increase aggregate demand and close the inflationary gap.

If the Economy Is Experiencing an Inflationary Gap, Keynesian Economists