If European countries such as Ireland are unable to close recessionary gaps with expansionary macroeconomic policies,then according to the AD-AS model,recovery will depend upon a(n)

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According to the AD-AS model, if European countries like Ireland are unable to close recessionary gaps with expansionary macroeconomic policies, then the only option left is for the price level to decrease to shift the aggregate demand curve to the right, resulting in a higher equilibrium output level. This is known as a self-correcting mechanism where the economy adjusts on its own to regain equilibrium. Therefore, a lower price level is the only option from the given choices that will help in recovering from the recessionary gap.

If European Countries Such as Ireland Are Unable to Close