If an active approach to policy is followed,how would an expansionary gap eventually close?
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

An active policy approach would involve reducing aggregate demand to close an expansionary gap, which would shift the aggregate demand curve leftward.

If an Active Approach to Policy Is Followed,how Would an Expansionary