A contractionary gap may be closed in the long run by a(n)
A)rightward shift of the short-run aggregate supply curve
B)leftward shift of the short-run aggregate supply curve
C)rightward movement along a fixed short-run aggregate supply curve
D)decrease in aggregate demand
E)increase in aggregate demand

Question

Quizplus · Accepted Answer

In the long run, a contractionary gap can be closed by a rightward shift of the short-run aggregate supply curve as resources become more fully utilized, leading to increased production capacity and output.

A Contractionary Gap May Be Closed in the Long Run