If an active approach is followed in closing an expansionary gap, _____
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 an upward movement along the short-run aggregate supply curve.

Question

Quizplus · Accepted Answer

An active approach to closing an expansionary gap typically involves contractionary fiscal or monetary policy, which would decrease aggregate demand, shifting the aggregate demand curve leftward.

If an Active Approach Is Followed in Closing an Expansionary