To close an expansionary gap,the government can

Question

Quizplus · Accepted Answer

To close an expansionary gap, the government needs to decrease aggregate demand. This can be done by decreasing government spending, which will decrease the amount of money in the economy and decrease demand for goods and services. Option A and E would increase aggregate demand, worsening the expansionary gap. Option B would also increase government spending, which would not help to close the gap. Option C would increase aggregate demand and worsen the gap. Therefore, option D is the best choice.

To Close an Expansionary Gap,the Government Can