The figure below shows the price level, real GDP, and the potential output for an economy. According to those who favor an active approach to policy, the economy can attain equilibrium at potential output if:

A) the SRAS curve shifts to the left.
B) the SRAS curve shifts to the right.
C) money supply is increased.
D) government spending is decreased.
E) aggregate demand increases.

Question

The figure below shows the price level, real GDP, and the potential output for an economy. According to those who favor an active approach to policy, the economy can attain equilibrium at potential output if:

A) the SRAS curve shifts to the left. 
B) the SRAS curve shifts to the right. 
C) money supply is increased. 
D) government spending is decreased. 
E) aggregate demand increases.

Quizplus · Accepted Answer

The Answer of The figure below shows the price level, real GDP, and the potential output for an economy. According to those who favor an active approach to policy, the economy can attain equilibrium at potential output if:

A) the SRAS curve shifts to the left. 
B) the SRAS curve shifts to the right. 
C) money supply is increased. 
D) government spending is decreased. 
E) aggregate demand increases.

The Figure Below Shows the Price Level, Real GDP, and the Potential