How might a recessionary gap be closed in the long run, assuming a passive policy?
A) by a rightward shift of the short-run aggregate supply curve
B) by a leftward shift of the short-run aggregate supply curve
C) by a rightward movement along a fixed short-run aggregate supply curve
D) by a decrease in aggregate demand

Question

How might a recessionary gap be closed in the long run, assuming a passive policy?  
A) by a rightward shift of the short-run aggregate supply curve 
B) by a leftward shift of the short-run aggregate supply curve 
C) by a rightward movement along a fixed short-run aggregate supply curve 
D) by a decrease in aggregate demand

Quizplus · Accepted Answer

A recessionary gap can be closed in the long run through a rightward shift of the short-run aggregate supply curve, as this indicates an increase in the total production of goods and services in the economy, reducing the gap without active government intervention.

How Might a Recessionary Gap Be Closed in the Long